The Ghana government issued a $750 million bond on the international market at a rate of 7.875% instead of the planned $1 billion.
But the government has hinted of issuing an additional $250 million bond next week to make-up, Bloomberg reported July 26, 2013 citing an official close to the transaction.
According to Moody’s its B1 rating for the $750 million bond is “on par with the sovereign’s B1 long-term, foreign-currency issuer rating, which has a stable outlook”.
The agency highlighted that although Ghana’s robust economic outlook is supportive of the rating, its “weak government financial strength and external vulnerabilities” continue to constrain the sovereign rating at the B1 level.
Moody’s also noted that Ghana’s fiscal and current account deficits leave the country susceptible to volatility in commodity prices and external financial shocks like a sustained currency depreciation or a sudden stop in portfolio inflows into the domestic capital market for government securities.
It added that Ghana’s limited foreign-currency reserve buffers and significant public and private foreign currency liabilities are also compounding the country’s external vulnerability.
By Ekow Quandzie