Ghana extends energy bond sale as demand falls short

Bloomberg

Ghana is extending the issuance
of non-sovereign bonds that the country needs for settling the legacy debts of state-owned energy utilities after demand for the securities fell short of the 6 billion
cedi ($1.4 billion) target.
While the West African nation allocated 2.4 billion cedis in seven-year bonds at 19 percent after receiving 2.5 billion cedis in bids, it only received 902 million cedis in offers for 10-year debt against a target of 3.6 billion cedis, lead advisers Fidelity Bank Ltd. and Standard Chartered Bank Ghana Ltd. said in an emailed statement. The sale of the 10-year securities will continue until November 3 with a price guidance of 19.5 percent, the advisers said.
The bonds were sold through a special-purpose vehicle that will
be funded with the proceeds
of energy-sector levies.
While Ghana used this structure to have the bonds excluded
from reported public borrowings, the International Monetary Fund said that the issuance will be
classified as government debt as it will be serviced from state revenues. Ghana is in the third year of an almost $1 billion extended credit facility program with the Washington-based lender and
has pledged to rein in public
debt, which measured more than 70 percent of gross domestic
product at the end of 2016.
Five major energy utilities, Electricity Company of Ghana, Volta River Authority, Ghana Grid Company, Ghana Gas and Tema Oil Refinery had 10.8 billion cedis in payable loans at the end of June last year, according to the IMF.