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Ghana’s Parliament approves $1b Eurobond

EuroParliament on Wednesday approved government’s move to issue a second sovereign bond (Eurobond) of up to one billion dollars on the international capital market to bridge the country’s infrastructural deficit and refinance its debts.

The 2013 Budget statement profiled initiatives aimed at fiscal consolidation and those proposals had a funding deficit of GH¢8 billion anticipated to be financed through borrowing and grants, thus necessitating the re-entry of the country into the international capital markets for alternative sources of funding capital projects at reasonable rates.

The Bond, which has a maturity period of seven to ten years, is subject to market conditions at the time of issue. Barclays Debt Capital and Citi Group will jointly manage the transaction, whilst EDC Stockbrokers and the Strategic African Securities would co-manage the deal.

About $284 million of the Bond would be utilized on capital expenditures in the 2013 budget statement, whilst 103 million dollars would be used as counterpart funding for projects already approved.

An amount of $363 million of the Bond would go to re-financing of maturing domestic debt to reduce cost of borrowing and a further $250 million would be employed on partial and gradual redemption of the Ghana 2017 Eurobond.

Source: GNA

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