Published: September 12, 2014
US$1bn deal prices at 8.125% – below target range, but still expensive.
Ghana has issued US$1bn of 12-year paper with a coupon of 8.125%. The pricing was below analysts’ predictions of 8.3%-8.7%, yet still high compared to recent 10-year issuances by neighbouring Cote d’Ivoire and Senegal, which priced at 5.625% and 6.25%, respectively.
The issuance attracted an orderbook of US$2.9bn, with US investors taking 52%, UK investors 29% and investors from the rest of Europe taking 19%. Barclays, Deutsche Bank and Standard Chartered were lead managers.
Ghana’s economy has struggled over the past 12 months. A big government deficit caused by excessive government spending, and a lack of dollars to pay for imports, have seen the currency plunge and the country have to go to the IMF for help. Ghana’s negotiating position will probably be strengthened by the success of this international issuance.
This is Ghana’s third trip to the market, making it the most frequent raiser of funds in sub-Saharan Africa. In April 2007 it raised US$750mn of 10-year paper at 8.5% in a benchmark transaction. It returned to the market in 2013, raising another 10-year, US$750m bond with a coupon of 7.875%.