Ken Ofori-Atta, Finance Minister

The Finance Ministry has dismissed Bloomberg’s report which seeks to suggest Ghana’s debut 20-year domestic bond was a failure and under-subscribed.

“We were aware that given the current market conditions and the limited appetite for longer-dated bonds, the size of the debut issue was unlikely to be of a benchmark size, and that was the reason it was structured as a shelf offering, so additional issuances could be done over time to reach the targeted GH¢450 million benchmark level,” the Ministry said.

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According to the Ministry, the bond was a fairly priced offering that had established another data point along government’s yield curve.

In a statement issued by the Ministry on Wednesday, it said it issued the bond to investors with a settlement date of August 26, 2019 in accordance with the issuance calendar, which is published on a quarterly basis at the beginning of each quarter.

“In the issuance calendar for the 3rd quarter, we included the possibility of issuing a 20-year bond for the first time subject to market conditions, and indicated a target size of up to GH¢450 million.

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“The primary reason for the issuance of a debut 20-year bond was to extend the tenor, yield curve, and establish a benchmark. This also helps to deepen the domestic market and improve liquidity through the issuance of benchmark size bonds that will be sizeable enough for investors to trade in and out of, thereby, creating liquidity, better price discovery or pricing and deepening the secondary market,” the Ministry noted in a statement.