Finance Minister, Ken Ofori-Atta
Ghana is aiming to issue a number of bonds of up to US$2 billion by November 2021, Bloomberg has reported.
According to the news portal, the issuance will be in the form of green and social bonds primarily meant to sell debt securities towards developmental funding such as the Free Senior High School Programme of the country.
This means Ghana would take the first leap of pioneering Africa’s first social bond issuance.
In an interaction with Bloomberg monitored by GhanaWeb, the country’s finance minister, Ken Ofori-Atta explained how the bond issuance will take fold.
“The expectation is that the bonds will be issued in the fall and the maximum can be US$2 billion after Ghana already sold US$3.03 billion in March out of the US$5 billion for which it has budget approval. Out of the total, US$3.5 billion will be used to refinance debt already raised. Our actual new debt will be US$1.5 billion,” the minister submitted.
He assured that government and the transactional advisors will be aiming to negotiate for the best terms possible of the bond issuance.
“Sustainable bonds are not cheap, there is no discount and we will seek to negotiate for the best terms though,” Ken Ofori-Atta noted.
Already, Ghana has announced its intention to borrow up to US$5 billion in sustainable bonds on the international capital market for the 2021 fiscal year of which proceeds from the sale will used to refinance debt for social, educational, health and environmental projects.
Minister of State at the Finance Ministry Charles Adu Boahen had earlier revealed government will contract some of the same transactional advisors it used for the sale of its historic zero-coupon bond sale back in March 2021.
The bond sale which will come in the form of social and green bonds follows an earlier sale of four zero-coupon debt to investors on the international capital market.
The Eurobond deal which was estimated at US$3.025 billion came with 20-year, 12-year and seven-year securities.
As lead managers of the zero-coupon bond sale, The Government of Ghana contracted the Bank of America Corp., Citigroup Inc., Standard Chartered Plc, Standard Bank Group Ltd. and Rand Merchant Bank Ltd.