$200m left to pay on 2007 Eurobond – Seth Terpker

The Minister of Finance Seth Terpker has disclosed that the government will soon complete the payment of the country’s first 750 million dollar Eurobond which was issued in 2007.

According to Seth Terpker the outstanding balance to be paid was 200 million dollars which has the redemption fully funded.

Ghana sold a 750 million dollars 10 – year Eurobond in 2007, to finance capital expenditure at the time.

Being the first time Ghana had gone to the capital market to raise funds the opportunity afforded the government at the time to the abundant appetite for the debut bond from the West African country and possibly for future issues from the continent.

The bond was sold at par to yield 8.5 percent, the tight end of the guidance, rate which was commended to be one of the lowest in the midst of the financial crises.

Speaking to thebftonline.com at the sidelines of a press conference on Ghana’s debut 10 – year domestic Cedi bond, Ghana’s Minister of Finance Seth Terpker said managers of the economy were ready to pay off any investor who was ready to trade his bond.

“We are left with an outstanding 200 million dollars to pay of the 750 million dollar Eurobond issued in 2007, but its fully funded. We have put money aside into the sinking fund to be buying back anytime anybody wants to trade because that was one of the uses of funds which we did this year.”

Mr. Terpker further stated that “we wanted to avoid that rollover risk, so we have put money aside to be buying back the bond or to redeem it. So now we have three options, we can buy back if it is trading, we can decide to buy it off we feel we don’t like the rate or refinance at a better rate.”

The finance Minister explained that now the investors know that Ghana have options, unlike in the past Ghana had only one option which was to refinance most of these debts which were maturing.

Ghana’s Eurobond history

Ghana at the moment has issued five different Eurobonds already for varied reasons. The first bond for 750 million dollars was issued in 2007 at an interest rate of 8.5 per cent to be repaid in 10 years.

The second bond was issued 2012 for 1 billion dollars at 7.875 per cent interest with a 12-year maturity.

In September 2014, the third bond of 1 billion dollars was issued at 8.125 rate of interest payable in 12 years was issued

In spite of the challenges within the economy, the managers of the economy went ahead to issue the fourth Eurobond at a coupon rate of 10.75 for 15 years which was described as one of the highest in the region.

The government of Ghana recently has issued yet another Eurobond 750 million dollars to pay some maturing debts and also support the fiscal economy of the country.

The coupon rate was 9.25% .

The country’s total debt as at July 2016 stood at above 110 billion cedis which represents around 67.38% of GDP.