Ken Ofori Atta
Government’s attempt to raise GH¢6 billion for the energy bond, which it issued last week yielded GH¢3.4 billion as at Friday, October 27, 2017.
The managers of the bond have had to announce an extension of the auction for the 10-year bond by one more week.
The amount raised so far represents about 57 percent of the GH¢6 billion needed.
But it is worth noting that more than 70 percent or 2.5 billion cedis of the amount, was realized from the 7-year bond issued.
The 10-year bond, attracted GH¢902 million, far less than the GH¢3.6 billion target.
Dr Lord Mensah, an economist, had earlier indicated that government will be paying 19 percent interest on the GH¢2.4 billion.
For economist Dr Eric Osei Assibey, the rate may just be realistic.
“The fact that this bond didn’t have any kind of Sovereign guarantee, there’s some amount of risk that investors associate with this kind of bond. Therefore I think 19 percent is quite fair, and because it is also a long-term bond, and there is so much uncertainty around it, you would expect that investors will definitely go in for a higher cost,” he stated.
Meanwhile, managers of the bond have extended auctioning for the 10-year bond for seven more days.
The auction is now expected to close on Friday, November 3rd, 2017, and it is unclear what prompted this move this time around.
But it appears that investors requested for an extension due to the nature of the bond.
Dr. Osei Assibey also shared his expectation after the close of bids on Friday, November 3rd.
“It could just be around the figure expected, so let’s give some plus or minus to that…the confidence level over the last couple of months has increased by the fact that the micro economic indicators are on track, and also having the IMF coming in to back the government’s policies and others.”
Analysts are however optimistic that the eventual completion of the process should turn around the fortunes of the various State Owned Enterprises whose operations have been affected by the accumulated debts.
–Citifmonline