There was weak interest in the first 5-year Treasury bond issued by the Ghanaian government in 2017 as investors tendered bids worth GHS420.14 million against an initial target of GHS600 million. The Government accepted bids worth GHS369.47 million, representing 88.0% of amount tendered by investors.

The government indicated that a GHS600 million 5-Year bond was scheduled to be issued in January 2017 as part of a fiscal plan involving the issuance of GHS17.40 billion treasury securities in the first quarter of 2017 to rollover maturities and finance government business in Q1 2017.

We believe that the announcement of an initial pricing of 17.25% - 18.75% may have contributed to the weak demand. The bond was issued at a yield of 18.75%, which represents a drop of 600bps compared to the yield of 24.75% paid on the previous 5-year bond issued. Treasury yields have been trending downward in Ghana on the back of favorable inflation trend. Please see below the new yield curve of the Ghanaian economy.

Investors are expected to settle the bond on Monday January 30, 2017 and the bond is expected to be officially issued on the same day.

The joint bookrunners were Barclays Bank, Stanbic Bank and SAS.