Ghana to open bids for energy bonds worth 6 bln cedis ($1.36 bln)

10/24/2017 2:14:30 AM

Tenors likely to range between 7 to 10 years at yields above 18% 

Ghana will start receiving bids on Tuesday for domestic bonds worth 6 billion cedis ($1.36 billion) to settle energy sector debts that have accumulated over the past decade, lead arrangers said on Monday. The 7-year and 10-year bonds to be priced on Thursday form part of the government’s plans to raise a total of 10 billion cedis to settle debts owed by state power utilities to banks and bulk oil distributors.

The government in June named Standard Chartered Bank and local lender Fidelity as lead managers for the bond, that is open to foreign and local investors and is backed by the Energy Sector Levy Act, which is a vehicle set up to issue government-sponsored debt to clear the debts.

The advisers are expected to release pricing guidance on Tuesday but markets say the yield could range between 18 and 20 percent. Settlement is due for Monday, Xorse Godzi, global markets at Standard Chartered Bank Ghana told reporters.

He said 2.4 billion cedis would be issued for 7 years and the remaining 3.6 billion would have a 10-year maturity.

“It is going well so far and we’ve seen a tremendous interest from investors, driven by the government’s commitment to transparency in the process,” Godzi said at the end of an investor meeting in Accra. ($1 = 4.38 cedis)

Source: Reuters 

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