RICHARD KOKOIH
RICHARD KOKOIH, Head of Client Coverage of the First National Bank (FNB) Ghana, has affirmed the bank’s commitment to supporting the government in its bond-issuance programme to increase the availability of funds for financing developmental projects.
He said the important role of banks like FNB in the bond issuance process could not be underestimated at this crucial time, indicating that the bank had access to a pool of investors who when called upon would be willing to invest in the government’s bonds and corporate securities at good rates
Mr. Kokoih made this known after a member of the First Rand Group, RMB Nigeria, won the 2020 Merchant Bank of the Year Award for the third consecutive time and the 2020 Debt Arranger of the Year for the second consecutive time at the Business Day Awards in Nigeria recently.
“We are appointed lead arrangers/managers, co-arrangers/managers or book runners due to our access to a wide range of investors both locally and globally, and we support the distribution end-to-end,” Mr. Kokoih stated.
According to him, it is the reason that corporate organizations may start speaking to their “bankers today to understand the process of debt capital market issuance. And let me say when we either lead or play a role in bond issuance, we ensure that the beneficiary institution or the government receives good rates or what we call value for money.”
He asserted that if considered as part of the arrangers for Ghana’s bond programme, the FNB would look at raising funds that could be used to provide long-term currency finance for government businesses and also protect the nation from foreign-exchange risks.
“We are delighted to put our capital markets expertise, extensive Africa presence and knowledge of international and local markets to work in partnership with the Government of Ghana on its landmark initiatives like the century bond which brings funds that will help the government to meet its development goals,” Mr. Kokoih noted.
In recent times, the international and local capital markets have accepted risk on sovereign issuances on the international scene and Ghana was able to issue its first long-dated maturity bonds worth billions, running into 2051 tenors.
In April 2019, Ghana went to the market and successfully priced its $3 billion Eurobond issuance when the appetite and comfort from investors for the country’s bonds were high.
Kokoih explained that bonds usually had longer maturity (5-10 years or more) and larger funding sizes due to the more liquid global or domestic investor pool and had no amortization requirement which reduced the pressures on short term cash flow.
He recommended for local corporate firms to work on their books and consider issuing bonds which would help in extending the maturity profile of the debt, widen the issuer’s institutional investor base which would benefit future equity and capital market activities and provide greater operational flexibility and mitigate any liquidity concerns.
Currently, there are nine corporate clients who have issued corporate bonds amounting to about GH¢7.3 billion ($1.5 billion) with E.S.L.A Plc accounting for over 90% (GH¢5.66 billion) of the issuance.
A business desk report