Local portfolio investors will have the opportunity to invest up to GHc8.250 billion in Government of Ghana’s domestic debt securities during the first three months of 2019, according to the domestic debt issuance calendar for the first quarter of this year, released by the Ministry of Finance.
This amount comprises debt securities with tenors of 91 days, 182 days and 364 days to be issued during the period, all of which are reserved strictly for domestic investors.
Altogether though, total domestic debt securities to be issued by government during the first quarter of the year will amount to GHc11.250 billion, although the other GHc3.00 billion, comprising debt securities with tenors of two years, three years and five years respectively, will be open for subscription to nonresident investors as well and this category of investors have tended to dominate subscriptions of such medium term issuances to date.
Of the total amount to be raised, GHc10,149.84 million will be used to refinance maturing debt while the other GHc1,100.16 million will comprise new debt used to finance government’s operations. The new debt will form part of the GHc4,787.8 million in domestic financing of government’s projected fiscal deficit for 2019, targeted at 4.2 % of the (rebased) Gross Domestic Product.
The largest segment of the debt securities issuance for the first quarter of this year will be in the form of 91-day treasury bills amounting to GHc4, 700 million of which GHc1, 400 million will be issued in January, the same amount in February and GHc1, 900 million in March.
Issuance of GHc182 day bills will amount to GHc1,800 million comprising GHc700 million in January, GHc500 million in February and GHc600 million in March. For 364 day treasury notes (which are replacing the erstwhile one year notes), GHc250 million will be issued in January, GHc200 million in February and GHc300 million in March.
Two year bond issuances, open to foreign as well as local investors will be issued to the tune of GHc1,000 million in January, GHc400 billion in February and another GHc400 billion in March, totaling GHc1,800 million.
Three year bond issuances will total GHc1, 600 million comprising GHc800 million in January and March respectively. One five year bond issuance will take place in February to the tune of GHc600 million. These will also be open to foreign as well as domestic investors.
Both the 91 day and 182 day Treasury bill issuances will be done weekly by auction, while the 364 day issuances, also sold by auction will be bi-weekly. The one year, two year, three year and five year instruments will be sold using the book building approach.
The debt issuance calendar is built taking into consideration government’s needs to refinance maturing debt, its own new financing and liquidity needs and the objective of lengthening the public debt profile.