Ghana local firms that helped to issue $3bn Eurobond

 Five indigenous financial institutions have emerged as critical parts of the processes that led to the raising of US$3.025billion in Eurobonds for Ghana in March 2021.

The institutions - Fidelity Bank Ghana Limited, CalBank PLC, Databank Brokerage Limited, IC Securities (Ghana) Limited and Temple Investments Limited - acted as co-managers of the transaction that turned out to be the country's largest bond sale in history and featured a novel zero-coupon Eurobond, the first of its kind by an emerging market economy.

Known as co-managers in the finance parlance, the five indigenous firms played supporting roles to the joint lead managers in the issuance that was oversubscribed in spite of the grim that the COVID-19 pandemic posed to investor appetite.

The firms worked with their foreign counterparts to develop investor presentation, fashion out the liability management strategy and coordinate the logistics for the first ever virtual roadshow outside Accra.

They also helped to aggregate what turned out to be significant domestic demand for all tranches of the Eurobond, with the largest being the debut zero-coupon bond.

Experts say the demand to the local co-managers came mainly from domestic indigenous investors and that provided access for Ghanaian investors on the international capital markets.

Historically, local co-managers have contributed relatively lower amounts to the total order books.

However, in recent years, there have been improvement in the local co-managers contribution to the total order book, with each successive issuance enjoying increments.

Analysts say the successful collaboration between the local co-managers and the joint lead managers in the 2021 bond sale resulted in the oversubscription by investors and the government securing favourable interest rates for the four-tranche Eurobonds in spite of the impact of COVID-19 and the energy and the financial sectors debts on the 2020 fiscal deficit.


The $3.025 billion Eurobond was novel as it was the largest Eurobond issuance by the country and also marked the first time a zero-coupon bond denominated in US dollar had been issued by an emerging market economy for new money or outside of a restructuring.

Of significant importance is the fact that it also marked the first time that four tranches had been issued by a SSA country.

Impressive showing

The Minister of Finance, Mr Ken Ofori-Atta, told the Daily Graphic on April 14 that he was delighted about the role of the indigenous firms in the issuance processes, explaining that their active involvement was testament that efforts by the government to develop indigenous capacity in the banking and financial sector were yielding the expected results.

Beyond helping investors domiciled in the country to access the international capital market, Mr Ofori-Atta said the arrangement ensured that almost 50 per cent of the novel zero-coupon bond was taken up by these resident investors, a development that he said was positive for the economy.

“For the first time in Africa, we have seen local managers drive significant local market participation in fund raising in a global Eurobond. Close to 50 per cent of the zero-coupon bond was taken up by the local market through the efforts of the local co-nanagers, " he said.

The Minister of Finance said the gains from the local co-managers showed the deepening of the financial sector and further expressed the commitment of the government to work with the private sector to unlock more opportunities for Ghanaian enterprises.

Mr Ofori-Atta disclosed that Ghana was currently the only country in sub-Saharan Africa (SSA) to have "logistics for global issuances managed by local entities.”

He noted that while the local co-managers supported the joint lead managers in the various streams of work, including the investor presentation, development of the liability management strategy and the logistics for the virtual roadshow, "there is the desire for local institutions to take on other lead roles in a bid to localise a significant portion of the work for global and local fund raising efforts."

Usage of proceeds

Of the amount issued, about $1.5 billion of the 2021 Eurobond, which was approved last year, is to be used to finance this year's budget deficit.

It followed elevated pressures on the public purse, following the outbreak of the COVID-19 pandemic and the rolling out of measures by the government to stop the spread and mitigate the impact on lives and livelihoods.

The government also planned to use part of the proceeds to pay off existing debts that were relatively expensive and closer to maturity.

Known as liability management, the practice helps to reduce the average cost of debt and create fiscal space for the government.


The country made its debut into the Eurobond market in 2007,with the latest being in March when the government successfully raised $3.025 billion in four tranches.

Thus, while Eurobonds are not new to the country, the issuance of a four-year zero-coupon tranche was an innovative market-oriented solution to address post-COVID-19 challenges and improve the cash flow required for debt servicing.

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