7-year T-Bond issuance opens today

Government has indicated that it will today start the process for the issuance of seven-year treasury bonds with the opening of the book-build.

This comes after a release of an initial pricing guidance for the bond issuance through the Ghana Stock Exchange days back.

The Bank of Ghana on Friday, August 7, 2020, made an announcement that the Bonds will mature in 2027.

The bank of Ghana said each bond to be issued shall have a face value of GHc 1, with a minimum subscription of GHc 50,000 and multiples of GHc 1,000 thereafter. The offer will be opened to both local and foreign investors.

The Books are expected to be closed midday on Thursday, around 2:30 pm, with the revised and final pricing determined.

Successful bids will be cleared at a single clearing level. However, in the event of oversubscription, there will be a discretionary allocation at the single clearing level. Investors are expected to be settled or issued with the bonds on Monday, August 17, 2020.

Per its issuance calendar, Government aims to build benchmark bonds through the issuance of the different instruments, including the seven-year bond through the book-building method.

The six-year bond is set to be issued through Absa, Databank, Fidelity Bank, IC Securities and Stanbic acting as book runners for government.

Per the government’s debt issuance calendar for June to August 2020, an amount of GHc 1,000 million in seven year bonds is expected to be issued this month. Of the GHc 17,837.87 million domestic debt securities to be issued during the three month period, GHc 5,987.87 million is planned for the month of August.

Treasury bonds (T-bonds) are government debt securities issued by the federal government that have maturities greater than 10 years. T-bonds earn periodic interest until maturity, at which point the owner is also paid a par amount equal to the principal.

Treasury bonds are part of the larger category of U.S. sovereign debt known collectively as treasuries, which are typically regarded as virtually risk-free since they are backed by the U.S. government’s ability to tax.


Paa Kweku Eshun|Talksafrica.com

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