Government has once again accepted all bids for the 3-year cedi bond that was auctioned.

According to trading results, government accepted all bids tendered to raise GH¢650.16 million.

Perhaps, the results may suggest some uncertainties on the Ghanaian market with investors mindful of the covid-19 pandemic, election fears and other fiscal challenges in the economy.  

But the yield or coupon rate was 19.25%, a rate which many analysts described as being in line with secondary bond market pricing levels.

Since it’s a rollover instrument, majority of the funds will be used to settle maturing debt.

A book-building approach was adopted, indicating a pricing guideline set up before the bond was issued.

Again, Absa, Databank, Fidelity, IC Securities, Stanbic were the joint book runners.

With the exception of the 2-year bond issued last month, the government has been accepting all bids for bonds issued since the outbreak of covid-19.

This is due to very limited participation from non-resident investors on the domestic market. This leaves the domestic debt market with the main responsibility to fund the extra financing gap.

Sale of November 12th bonds

On November 12th, government accepted all bids for the 7-year cedi bond and the 3-year dollar bond issuance.

For the 7-year cedi bond, it raised ¢1.03 billion at a rate of 20.5%, whilst it got $388.9 million dollars for the 3-year dollar bond at an interest of 4.75%.