Ghana Grabs $14 Billion 40-year Eurobond
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Ghana sold the longest-dated Eurobond ever issued by a sub-Saharan African government as part of a debt issuance to raise $3 billion. The government issued a $750 million tranche, which amortizes and has an average life of 40 years, at 8.875%, making it the highest-yielding sovereign dollar bond so far this year. Pricing was reduced from the initial talk of 9.4%
The report by Bloomberg 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. 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, Bloomberg noted.
Are we witnessing a massive show of confidence in the Ghanaian economy by foreign investors?
Previous plans by the government in September 2018 to raise a century bond in dollars was futile due to selling a $1 billion, 2051 instrument with yield of 8.95% six months later. The yield on that dropped 12 basis points on Tuesday to 8.66%. In spite of the coronavirus outbreak, Investors seem to have defied the trend to hold high-risk assets and this will certainly boost the government coffers. This is a big win for Kofi Ofori Ata who spearheaded the team of delegates. Spreads on emerging-market government dollar bonds have widened to 307 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, Morgan Stanley, Standard Bank Group Ltd. and Standard Chartered Plc arranged Tuesday’s sale.