Government cancels 2-year, 5-year cedi bond issuance due to high yields – Report

The Government of Ghana has rescinded its decision on the issuance of the 2-year cedi and 5-year cedi dominated bonds, a Joy Business report has said.

According to the portal, the cancellation comes after bonds were initially issued back in May and March this year and were re-opened to both resident and non-resident investors.

The portal further explained that the auction was expected to be completed on August 25, 2022.

Touching on the rationale behind the discontinuation of the offer, Joy Business said government attributed the decision to high yields being demanded by investors.

It said that the coupon rate for the 2-year bond was pegged at 21.50 percent, while that of the 5-year bond was at 20.75 percent.

In addition, market conditions, coupled with recent economic developments have resulted in high treasury bill rates selling for more 27 percent, forcing investors to set demand for more than 30 percent for the debt instruments.

The Government of Ghana on its part has said it is wary of paying more interest on its loans moving forward to help address the country’s debt situation.

Meanwhile, in March and May this year, government secured an amount of GH¢846 million and GH¢1.2 billion following the sale of the two debt instruments.

For the bond sale, the expected minimum bid for investors was GH¢50,000 and multiples of GH¢1,000 afterward.

The market specialists which facilitated the bond sale were; Absa Bank, Black Star, CalBank, Databank, Ecobank, Fidelity, GCB, IC Securities and Stanbic Bank.