Ken Ofori Atta – Finance Minister
Government has begun engaging investors outside the country over plans to raise some $2.5 billion.
Unlike previous engagements on the Eurobond sale, the Finance Minister Ken Ofori Atta and his team are planning to raise the targeted amount by next week.
Sources say the engagement would start in London.
The team will then move to New York, California, Boston and back to London by next week.
Government is hopeful of closing the deal in London by next week where it hopes to raise the target amount at that time.
Government intends to use part of the funds to clear the previous bonds that are maturing, while the remaining would be used for infrastructure projects outlined in the budget.
According to government sources, the planned Eurobond sale is part of several options being considered to help finance the budget deficit.
Expectation
For many, the challenge would be the cost or rate of raising the funds, when the government finally closes the deal next week.
But Prof Peter Quartey is expecting some good rate for the government.
He said, “Currently our ratings are likely favourable so I don’t expect to go beyond 8% at most should be 8.5%”
But the government insists it has laid the right foundation to secure a good rate during the roadshow.
Deputy Minister of Finance, Kweku Kwarteng said, “We would like to engage the market and to get the best available price for the bonds that we are going to issue. But we consider that our macro-economy now has sufficient pedigree to get us better rates than we have done in the past and that is what we are pursuing.”
Sources close to the transaction say they are looking at closing the deal at around seven percent.
For some, a lot of things are happing now that could ensure that government gets a good rate at the end of this roadshow.
Sources indicate that Standard Chartered Bank, JP Morgan, Bank of America and Citibank, would act as lead advisors for the transaction while Fidelity Bank and IC Securities would be the local partners.
– Myjoyonline