February 12, 2019 / 11:48 AM / By FDC/ Header Image
Credit: ARY News
On Tuesday, February 4th, the government of Ghana raised $3 billion in a Eurobond auction. The Eurobond sale was aimed at boosting the government's coffers and it definitely raised the interest of various investors as the bonds were oversubscribed five times.
The Ghanaian Cedi is currently the world's best-performing currency against the dollar. In recent years, the country has enjoyed some economic stability after concluding the three-year lending programme with the International Monetary Fund.
Ghana sold sub-Saharan Africa's longest-ever bond. According to Bloomberg, the 6-year bond sold $1.25billion at 6.375% yield, 14-year bond sold$1 billion yielding 8%and the 41-year bond $750 million at 8.875%. The bonds would mature in 2027, 2035 and 2061 respectively. Ghana's government stated that the low rates reflect a reduced risk premium to improve economic conditions in Ghana.
Following Ghana's example, Nigeria is also approaching the international capital market to raise $3.3 billion. This would be used partly to fund the country's 2020 budget.