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.
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%.
“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.”
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.
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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