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Ghana will issue a new 5-year bond to raise 500 million cedis ($127 million) this month to help restructure its growing debt, the finance minister said on Tuesday.

The bond, open to offshore investors, will mainly target institutional investors such as pension funds and unit trusts and its proceeds will be used to support government finances, Finance Minister Seth Terkper said at a meeting with investors.

Short term debts accounts for about 42 percent of Ghana's total domestic debt, squeezing government finances, he said.

"We want to move away from the short ends of our securities to medium and longer term debt issuance," he said, adding that the book runner system was part of reforms to extend maturities.

The government has appointed Barclays Bank Ghana, Stanbic Bank Ghana and Strategic African Securities to serve as joint book runners to rally investors for the bond.

The book runners approach, to be used for mainly for medium and long-term securities, will run on a pilot basis alongside the existing central bank auction system, Sam Mensah, a government advisor on debt, told Reuters.

Source: Reuters

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