Energy bond fails to meet GH¢6bn target

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E.S.L.A PLC, on Monday, November 6, 2017, said it successfully closed its books for the issue of the ESLA bonds on Friday, November 3, 2017, after extending the timeline for the issue of the 10-year bond by one week.

Despite investors making bids in excess of GH¢2.79 billion for the 10-year bonds with interest rates ranging between 19% and 20%, ESLA plc said about GH¢2.29 billion was accepted at an interest rate of 19.5%.

Total bids submitted by investors for both auctions, the 7 and 10-year bonds amounted to GH¢5.32 billion, GH¢4.70 billion was accepted  in the first phase of the planned GH¢10 billion ESLA Bond programme.

The bonds which were issued as the first tranche under the bond programme comprised of 7-year (GH¢2.4 billion) and 10-year (GH¢2.29 billion) bonds carrying coupons of 19.5% respectively.

Though the ESLA bond is a new asset class, the pricing was very tight and compares favourably with local currency Government issues.

Whereas E.S.L.A PLC went to market with an initial target amount of up to GH¢6 billion out of the GHc10 billion Programme for the first tranche, the issuer in consultation with the Transaction Advisors made a decision to decline offers in excess of its price target.

Given that this is a Programme, future issues will be undertaken subject to favourable market conditions and adequate levels of Energy Debt Recovery (EDR) Levy flows.

Subsequent issuances will continue until the total outstanding legacy debts and other obligations due suppliers and other creditors within the energy sector have all been settled.

E.S.L.A PLC, the issuer, shall ensure that EDR Levies are monitored and collected in a timely manner to ensure that all bond covenants are met in accordance with the prospectus. Bond holders will be paid from EDR Levy receipts assigned to E.S.L.A PLC.

All financial flows will be published in addition to financial statements, that will be audited by independent auditors’, on the E.S.L.A PLC website at www.eslaplc.com.