The government cancelled the issuance of the 2-year cedi and 5-year cedi-denominated bonds which were initially issued in May 2022 and March 2022.
The auction of the debt instruments, which were re-opened to both resident and non-resident investors, was expected to have been completed on Thursday, August 25th, 2022.
Our reliable source understands that the discontinuation of the offer was due to the high yields investors were demanding.
Originally, the coupon rate for the 2-year bond was 21.50%, whilst that of the 5-year bond was pegged at 20.75%.
However, market conditions that have culminated in Treasury bills going for more than 27% meant investors were going to demand over 30% for the two debt instruments.
Government is therefore mindful of paying more interest on its loans going forward.
A little above ¢846 million and ¢1.2 billion were secured when the debt instruments were sold in May 2022 and March 2022.
The expected minimum bid was ¢50,000 and multiples of 1,000 thereafter.
Absa, Black Star, CalBank, Databank, Ecobank, Fidelity, GCB, IC Securities, Stanbic were the bond market specialists.
The price or interest rate for the last 3-year bond issued in July 2022 was 29.85 percent.
It came at a time, treasury yields were surging as a result of rising inflation rate.
This year, government interest payments is estimated at about ¢42 billion.
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Source: My Joy Online
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