The government through the Bank of Ghana yesterday re-opened the 2-year Treasury Bond issued last year to raise additional GH¢485.91 million which it described as current amount outstanding.
The bond was originally opened on February 19, 2018 and was expected to mature on February 17, 2020.
Business Finder gathers that the government issued the debt instrument to bridge some financing gap within the 2019 budget.
In this regard, majority of the proceeds of the bond which was opened to both resident and non-resident investors will be used to finance infrastructure or capital expenditure.
Each bond was expected to have a face value of GH¢1 while the minimum bid was GH¢50,000 and in GH¢1,000 thereafter.
The coupon rate for the bond was 16.50 per cent, meaning investors will receive 16.50 per cent interest on their principal which is expected to be paid semiannually until maturity.
Fidelity Bank was the lead manager for the bond which will be listed on the Ghana Stock Exchange.
Last week Friday, government raised a total of GH¢773.32 million in short term securities mainly 91-day and 182-day Treasury bills. This was short of the targeted of GH¢823 million.
Government is expected to increase borrowing in 2019 to fund a higher fiscal deficit target of 4.2 per cent, up from 3.7 per cent in 2018.
This is expected to enable the government to increase spending in 2019 to ramp up infrastructure development and increase funding to flagship programs that formed the bedrock of its campaign promises.