Ghana Planning to Raise $1 Billion in Eurobond Sale This Week

US-AFRICA-SUMMIT

Ghana Finance Minister Seth Terkper, second left, shakes hands with Dana Hyde, CEO of the Millennium Challenge Corporation (MCC), after signing the Ghana Compact during ceremonies in Washington, D.C.

Photographer: Paul J. Richards/AFP/Getty Images
  • Nation initially said it planned to raise $1.5 billion
  • Sale may be finalized on Tuesday after investor meetings

Ghana is seeking to raise as much as $1 billion in its third Eurobond sale in as many years to help finance its budget deficit and repay debt.

The West African nation may sell the securities on Tuesday, “depending on the market,” after investor meetings in London and the U.S. that started on Sept. 23 and were scheduled to run until Sept. 30, according to a person familiar with the matter, who asked not to be identified because the information is not yet public.

The amortizing bonds will have an average maturity of 10 years, the person said. Moody’s Investors Service rated the debt B1, two levels above Ghana’s sovereign rating, because $400 million of the total amount will be guaranteed by the International Development Association, a unit of the World Bank.

Finance Minister Seth Terkper told lawmakers in July the nation would seek to raise as much as $1.5 billion, of which the Washington-based World Bank would guarantee $400 million. Part of the bond’s proceeds will be used to pay down dollar debt due in October 2017, Terkper said. 

Ghana agreed on an almost-$1 billion program, three-year program with the International Monetary Fund in April to help narrow the budget gap and support the cedi, then the world’s worst-performing currency. Terkper didn’t respond to two calls to his mobile phone on Monday.

Yields on Ghana’s $1 billion debt maturing in May 2023 climbed 15 basis points to 10.77 percent as of 2:04 p.m. in Accra, the capital. The cedi gained 0.9 percent to 3.79 per dollar, paring its loss this year to 18 percent.

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