This comes as Ghana, on Tuesday, February 4, 2020, became the first-ever country on the African continent to issue a 41-year bond, as the West African country successfully raised US$3 billion in the international debt capital markets.
Bloomberg report lauds Ghana, says investors are showing massive confidence in the economy than other African countries
A Bloomberg report has shown investors are showing massive confidence in the economy than other African countries.
Bloomberg report lauds Ghana, says investors are showing massive confidence in the economy than other African countries
According to the Bloomberg report, this the longest-dated Eurobond ever issued by a sub-Saharan African government as part of a debt issuance to raise $3 billion.
The government launched the sale of a $750 million tranche, which will amortise and have an average life of 40 years at a yield of 8.875%, according to a person familiar with the matter who asked Bloomberg not to be identified because they’re not authorized to speak about it.
The report further stated that Ghana is also selling $1 billion of 2035 securities at 8% and $1.25 billion of 2027 notes at 6.375%.
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“Investors have placed around $14 billion of orders, according to a second person, who asked not to be identified,” Blomberg said.
Adding that “The yield for the longest-maturity instrument dropped from the initial guidance of 9.125% and is the highest-yielding sovereign Eurobond of the year so far.”
Background
The government said in September 2018 that it planned a century bond in dollars. While that didn’t happen, it sold a $1 billion, 2051 instrument with a yield of 8.95% six months later.
The yield on that dropped 12 basis points to 8.7% in London.
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The sale comes at a time when the premium investors demand to hold riskier assets is rising, in large part due to the coronavirus outbreak. Spreads on emerging-market government dollar bonds have widened to 313 basis points over U.S. Treasuries, from 291 basis points at the start of the year, according to a JPMorgan Chase & Co. index.
Bank of America, JPMorgan Chase & Co., Morgan Stanley, Standard Bank Group Ltd. and Standard Chartered Plc are arranging Ghana’s sale.
The latest development is a massive show of confidence in the Ghanaian economy by investors.
This follows a Bloomberg report which said that the Cedi is the best performing currency in the world against the United States Dollar.
The report said Ghana's currency has strengthened 3.9% in 2020, the most among more than 140 currencies tracked by Bloomberg.
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