Gov’t to return to domestic bond market with new treasury programme

The government has announced plans to return to the domestic bond market, unveiling details of a new Treasury Bond programme aimed at reestablishing a stable domestic borrowing framework following the country’s recent debt restructuring exercise.

According to a brief released by the Finance Ministry, the government will issue senior unsecured treasury bonds denominated in Ghana cedis, with specific tenors and issue sizes to be announced ahead of each auction.

Investors seeking to participate will be required to submit a minimum bid of GH¢50,000, with additional investments accepted in multiples of GH¢1,000. The coupon rate will be determined through an auction process, with interest paid on a semi-annual basis.

The bonds are expected to be redeemed through bullet repayment at maturity, unless otherwise specified in future issuance documents.

Auction and Settlement Process

The bonds will be issued via auction using a book-building format, where bids may be submitted based on yield or price. Successful bids will be cleared at a single clearing level for new issuances, while reopened bonds will be allocated at the accepted price.

The Finance Ministry noted that it would retain discretion to allocate bonds in cases of oversubscription.

Settlement will be conducted electronically through the Central Securities Depository, with all securities issued in dematerialised, book-entry form. No physical certificates will be provided.

Once issued, the bonds will be listed and traded on the Ghana Fixed Income Market of the Ghana Stock Exchange, enabling secondary market activity among investors.

Approved Market Specialists

The ministry indicated that investors could participate in auctions through approved Bond Market Specialists, including:

· Absa Bank Ghana Ltd
· CalBank PLC
· Fincap Securities Ltd
· GCB Bank PLC
· One Africa Securities Ltd
· Stanbic Bank Ghana Ltd

Bids must comply with established guidelines for primary dealers and bond market specialists, the ministry warned.

Strategic Objectives

According to the Finance Ministry, the government’s re-entry into the domestic bond market is designed to re-establish a domestic funding programme, support liquidity management, and refinance maturing obligations.

The move is also expected to help rebuild a sovereign yield curve while providing investment opportunities for retail and institutional investors, including banks, pension funds, insurance companies and asset managers.

The ministry said proceeds from the bond issuance would be used to provide budgetary support, reinforcing government financing needs.

While documents did not specify an exact date for the fresh bond issuance, the ministry reaffirmed its commitment to transparent communication with investors, stating that further details, including auction dates, tenors and issuance sizes, would be announced in due course.