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Aug 24, 2012

Government Five Year-Bond Over-Subscribed By Over 200%

Ghana Government five-year bond to raise money to fund a number of infrastructural projects was oversubscribed by more than 200 percent, a statement from the Ministry of Finance and Economic Planning, announced yesterday.

The issuance of the bond, which was successfully completed, is the second 5-year bond issued this year and the fourth medium to long term bond issued this year.

Government proposed to raise an amount of GH¢300 million, however, the auction recorded inflows of GH¢1070 million which was oversubscribed by 257 per cent. “Government accepted 898 million cedis at a coupon rate of 23 per cent. This represents a decrease of three per cent from the coupon of the last five year issue. It is significant to note that about 80 per cent of the bids came from foreign investors,” the statement said.

Dr Kwabena Duffour, Minister for Finance and Economic Planning said, “This clearly demonstrates the confidence that investors have in the Ghanaian economy. The huge foreign investor participation in the auction is an indication of the strong appetite that foreign investors have for Ghanaian risk”.

Source: Castle Osu