Ghana Eurobond Yields Seen to Reach Record Low on Exports

The yield on Ghana’s $750 million Eurobond will probably fall to a record low this year as the West African nation benefits from strong exports and a smooth leadership transition, Ecobank Transnational Inc. (ETI) said.

The yield on the 8.5 percent bond due 2017 may fall to 5 percent, Angus Downie, London-based head of economic research at Ecobank, said in an e-mailed note today. The bond was issued in September 2007.

The forecast reflects “several positive macroeconomic” factors including demand for exports of cocoa, gold, timber and oil, “although there are downsides related to the fiscal position/public financial management, and the exchange rate.” Downie said. “The smooth transition of power to President Mahama is also a positive factor for investors to focus on.”

Ghana’s Eurobond fell for a ninth day, dropping 14 basis points, or 0.14 percentage point, to 5.358 percent as of 2:47 p.m. in the capital, Accra.

Former Vice President John Dramani Mahama was sworn in as leader on July 24 following the death of President John Atta Mills earlier that day. Former Bank of Ghana Governor Kwesi Amissah-Arthur was sworn in as the new vice president on Aug. 6.

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net