This was revealed by a former Finance Minister Seth Terkper, who told host of Citi Breakfast Show Bernard Avle, that  the dispute between the two countries led to the high yields Ghana got on the two bonds.

” …..At the time we are relying on the work the technical team was doing to show that we were confident. To some extent that most of the investors believed and were able to do this bond, it affected the yield and the rate. Sometimes when you are talking about the rate you wish you had bonds it is a very prime example of a sector that is beyond control which could affect the yields or the price paid for them, this was a real factor”. He said.

[contextly_sidebar id=”0zdW51SPVR9IuIDtJFM98602z7p3mbJF”]The revelation follows the Special Chamber of the International Tribunal of the Law of the Sea(ITLOS)’s ruling on the case over the weekend.

Yield on 2015 & 2016 Eurobonds

Yields on Ghana’s last two bonds, the fourth and fifth Eurobonds were the highest recorded in the history of the country.

The yield on the 2015 Eurobond for example was 10.75 percent, against government’s initial target of 8.5 percent while that of 2016 was at 9.25 percent.

The World Bank’s guarantee of 400 million dollars at the time, on the 2015 bond as well as plans by government to set up an infrastructure fund to use proceeds from the country’s Eurobonds played a key role in Ghana getting 10.75 percent interest, which was to be higher.

The high yield at the time were attributed to Ghana’s economic challenges.

Reacting to concerns over the high yield of 10.75 percent in 2015 Mr Seth Terkper had said Ghana remains the only sub-Saharan African country that is able to raise a fifteen year bond at such a yield and asked critics not to compare a 10 year bond to the current 1 billion dollar 15 year Eurobond.

“They were comparing a 15 year bond to a 10 year bond that is comparing apples to oranges. I think they would have served the Ghanaian public well if they have checked. There is a sub – Saharan country that was able to raise a 15 year bond in the first place and was able to roll it at a lower yield and thirdly under the circumstances which the markets find itself now. Now we are going to use the bond to refinance 90 day bill”.

ITLOS case impact on Eurobonds

But speaking on the Citi Breakfast show the Former Finance Minister Mr Seth Terkper stated that the rates were extremely high due to the dispute between the two countries and the uncertainty at the time of the outcome of the case.

”………The fact that it was so significant that usually before we do what is called the final descriptions, where a series of questions are asked of the Minister of Finance and one of them in 2015 and 2016 in particular was whether the Minister for Finance believed or had any information that suggests that Ghana would not win the case.”

Ghana dragged Ivory Coast to ITLOS in September, 2014 after negotiations with Ivory Coast over the disputed boundary broke down.

ITLOS however on September, 23, 2017 ruled that there had not been any violation on the part of Ghana on Ivory Coast’s maritime boundary.

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By:  Vivian Kai Lokko/citibusinessnews.com/Ghana

The post ITLOS case triggered high interest on Ghana’s Eurobonds appeared first on Citi 97.3 FM - Relevant Radio. Always.

The MP argues that government’s over-$2billion in bonds issued so far were essentially loans and were agreed to without Parliament’s approval, thus breaching of the Constitution, and hence must be nullified.

[contextly_sidebar id=”8IeM9o62tH5tWoBjvC20HBV3agZ5YEuu”]Documents sighted by Citi News indicate that Dr. Apaak is seeking “a declaration that upon a true and proper interpretation of the Constitution, particularly Articles 181(1),(2),(3),(4) and (6) thereof and section 56 of the Public Financial Management Act 2016 (Act 921), the 7 and 15 year bonds issued by the government of Ghana raising a total amount of USD 1.12 billion in or about April 2017 constitutes a loan and accordingly are unconstitutional, null and void for lack of parliamentary approval.”

He is also seeking a declaration that “any liability or obligation imposed on the Republic of Ghana by reason of the said bonds is/are unconstitutional” and a further order of “perpetual injunction restraining the government of Ghana from issuing bonds without the approval of the Parliament of Ghana.”

In April 2017, the government announced it was successful in the auction of a total of $2.25 billion in four bonds.

The first two bonds, totaling $1.13 billion dollars were issued at 15 and 7 years, with the same coupon of 19.75%.

In addition, the Ministry of Finance raised the cedi equivalent of USD1.12 billion in 5 and 10-year bonds via a tap-in arrangement.

These issuances represented the largest amount issued by a sub-Saharan African country in a day. The pricing obtained was also consistent with the initial price range of 18.95% – 19.85%.

The bonds attracted a number of global portfolio investors including a very substantial investment in the 15-year bond by a very well respected global financial investor.

The Minister of Finance, Ken Ofori-Atta, has stated that the proceeds will be used to repurchase and/or retire a portion of the higher coupon short-term public debt instruments, explaining that there will not be an overall increase in the total debt stock.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Apaak sues to stop issuance of bonds without Parliamentary approval appeared first on Citi 97.3 FM - Relevant Radio. Always.

It says the petition among other actions is only a diversionary tactic meant to sway Ghanaians from seeing the positive work the government is doing.

[contextly_sidebar id=”9KD7kvAfFC13C8AUO3iQb8VuVLPPuMRq”]A deputy Minister for information, Kojo Oppong Nkrumah said the government remains focused on fulfilling its promises to Ghanaians and will not debate the Minority in parliament or the opposition National Democratic Congress (NDC) on the issue,

The government in April this year raised $2.25 billion from four bonds including a 7 and 15-year bond, at a rate of 19.75%.

The bond which was open to resident and non-resident investors raised disquiet among members of the opposition NDC.

The Minority raised issues of possible conflict of interest following the purchase of 95% of the bonds by Mr. Trefgarne who is a Director of Franklin Templeton and a Board Chairman of Enterprise Group.

The government had defended the bonds issue explaining that it did not flout any regulation.

But the minority appears to have taken a keen interest in the matter and is using any means available to it to get challenge the issuance of the bond.

The Ashanti Regional Youth Organiser of the National Democratic Congress (NDC), Yaw Brogya Genfi, also recently petitioned the Commission on Human Rights and Administrative Justice (CHRAJ) over the matter, calling for investigations into it.

But speaking on Eyewitness News, Kojo Oppong Nkrumah said, “a lot of answers have been provided. We have come to believe that they will consistently keep bringing up this issue even when you provide them answers… They consistently issue statements about it because they know that when they do, [you] the media will stop following any good news and you’ll be chasing that particular story. We don’t have any problem with them, they can attend to any particular establishment as they ask for any information and those establishments shall provide them with that information that they want.”

“In the meantime, while they do that, we will remain focused on the governance agenda”

Lawyer demands authentic details of $2.25bn bond

Meanwhile, a private legal practitioner, Victor Kojogah Adawudu has written to the Attorney General requesting for more information on the controversial $2.25 billion domestic bond which was issued in April 2017.

According to the lawyer, Victor Kojogah Adawudu, he exercised his right to information due to the scanty details provided by the Ministry of Finance on the issue.

In a letter addressed to the Attorney General and copied to the Ministry of Finance, Mr. Adawudu, who also enclosed a processing fee of GHc 1,000, said the information he is seeking is aimed at addressing several concerns voiced on the matter.

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By: Jonas Nyabor/citifmonline.com/Ghana

The post Gov’t unfazed by Minority’s petition over $2.2 bn bond appeared first on Citi 97.3 FM - Relevant Radio. Always.