89% of gov’t’s borrowing in June to August to refinance maturing debt

  • GH¢17.8bn to be borrowed
  • Only GH¢2bn in fresh issuance

Government plans to borrow a total of GH¢17.8billion between June 20 to August 20, but 89% of the debt, GH¢15.8billion, will be used to roll-over maturing loans, with only GH¢2billion in fresh issuances.

According to the Ministry of Finance’s issuance calendar, government will be seeking to raise GH¢6.2billion this month – GH¢1.1billion lower than previously targetted.

Government is expected to raise the debt through a series of options or instruments including the 91-day and 182-day weekly issues; the 364-day bill will be issued bi-weekly through the primary auction, with settlement being the transaction date plus one working day; and securities of 2-years up to 10-years will be issued through the book-building method.

Issuance of the 20-year bond as a shelf offering will be re-opened based on investors’ requests and on market conditions; and consistent with the Medium Term Debt Management Strategy (MTDS) for 2020-2023, the Finance Ministry may announce tap-ins/reopening of other existing instruments depending on market conditions.

“It is our expectation that this 2020 June to August Calendar meets the requirements of market participants. We assure all stakeholders and the general public that we continue to strive for greater predictability and transparency in the domestic bond market,” a statement from the ministry said.

The issuance calendar is developed based on the Net Domestic Financing provided in the 2020 Budget, the domestic maturities, the 2020 Annual Borrowing & Recovery Plan (ABRP) and the MTDS for 2020-2023. The Calendar shows the securities that are intended to be issued in respect of government’s Public Sector Borrowing Requirements for the period June to August, 2020.

Government is expected to update the issuance Calendar on a monthly rolling basis, to reflect a full quarter financing programme.

In addition, 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 public debt.

Leave a Reply