Sunday, 8 September 2019

Govt plans to raise GHC14.3bn from local market


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By Elorm Desewu

The government plans to raise an amount of GHC14.337 billion from the domestic money market for the next couple of months. 

Of this amount, GHC13.645 billion would be used by the government to rollover maturing debts while the remaining GHC692.3 million which is a fresh issuance would be used to meet government’s financing requirements.

The calendar shows the securities that are intended to be issued in respect of Government’s Public Sector Borrowing Requirements for the period September to November, 2019.

From now to November this year, the government plans to issue a 91 day Treasury Bill worth GHC5.555 billion, 182 day Treasury Bill worth GHC1.4 billion, 364 day Treasury Bill worth GHC800 million, 2 year note worth GHC2.9 billion, 3 year note worth GHC2 billion, 5 year note worth GHC700 million, 7 year note worth GHC700 million and 20 year note worth GHC 287.8 million.

“We believe the publication of the 2019 September to November Calendar would meet requirements of market participants as we strive to ensure greater predictability and transparency in the domestic market”, according to the Ministry of Finance.

Per the issuance calendar, the government aims to build benchmark bonds through the issuance of the following instruments: the 91-day and 182-day will be issued weekly;  the 364-day bill will be issued bi-weekly also through the primary auction with settlement being the transaction date plus one working day; Securities of 2-year up to 7-year will be issued through the book-building method;  the amount of GH¢700.00 million for the 5-year bond in October, 2019 is expected to be raised through re-opening of existing 7-year bond (Tender 1585) maturing on 7th April, 2025; the Issuance of the 20-year bond as a shelf offering will be re-opened based on investors request and on market conditions; and Consistent with the MTDS, we may announce other tap-ins/reopening of existing instruments depending on market conditions.

The calendar was developed based on the Net Domestic Financing provided in the 2019 Mid-Year Revised Budget, the domestic maturities and the Medium Term Debt Management Strategy (MTDS) for 2019-2022.

The Calendar also takes into consideration Government’s liability management programme, market developments (both domestic and international) and the Treasury & Debt Management objective of lengthening the maturity profile of the public debt.

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