Investment banker: Ghana’s recent ratings led to oversubscription of Eurobond

Ghana is the first emerging market sovereign to add a zero-coupon bullet tranche to its bond financing portfolio

George Horatio Junior, an investment banker says a recent impressive assessment by some international rating agencies including Moodys and S&P may have led to the oversubscription of Ghana’s current sovereign bond on the international capital market.

Horatio Junior says investors are normally impressed by international institutions and this could have been a reason for the recent oversubscription.

Listen to Horatio Junior in the audio below:


The government made a successful debut in the international debt capital markets securing US$3 billion from an oversubscribed bond book value of US$6 billion.

Ghana becomes the first Sub Saharan African sovereign to issue a Eurobond in USD since the onset of the COVID-19 pandemic.

The country’s consistent ability to raise multi-billion-dollar financing and this pioneering use of a 4-Year Zero tranche is a testament to its hard-won credibility with investors, strong growth prospects and disciplined fiscal consolidation efforts in 2020, a statement from the Finance Ministry said.

“Ghana is the first emerging market sovereign to add a zero-coupon bullet tranche to its bond financing portfolio. This is significant as it enables the government to create fiscal space to build the economy back better,” the statement added.

Commenting on the bond, Ken Ofori-Atta, Minister for Finance-designate said, “This historic bond issuance is a strong signal that investors have confidence in our plan for debt sustainability, economic recovery and growth and that Ghana remains a ‘Pillar of Stability.’

This bond issuance comes after a series of fixed-income virtual meetings held locally in three days with investors from the United States, United Kingdom, Europe, Middle East and Asia.

The transaction comprised US$525 million 4-year zero-coupon, US$1 billion 7-year weighted average life (WAL), US$1 billion 12-year WAL and US$500 million 20-year WAL. The traditional Eurobonds priced at 7.75%, 8.625% and 8.875%, respectively.

Ghana’s four-year zero-coupon bond is an innovative market-oriented solution to address post-COVID-19 challenges and improve the cash flow required for debt servicing.

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