Accra- Ghana plans to issue a Eurobond worth up to $1 billion to refinance existing debt and fund infrastructure projects, its vice president said on Wednesday.
Kwesi Amissah-Arthur told Reuters some of the funds will be used to restructure debt issued by the oil- and cocoa-producing West African nation that is currently being serviced at high rates of interest.
"We are looking at the best conditions including costs and we will not do it until we're convinced it is the right time," Amissah-Arthur said.
Initial market reaction in London was favorable.
"The deal should be well received partly because they have said the cash will help with the amortization of the (existing) debt," said Stuart Culverhouse, head of research at Exotix, a frontier markets brokerage in London.
"If you look at similar bonds from Nigeria and Zambia, they came in 5-6 percent and Ghana should be able to get a similar rate. "
Finance Minister Seth Terkper said the government had yet to appoint advisors for the transaction. The proposal for the bond is subject to approval by Ghana's parliament, which is currently in recess.
"We hope to put it before the House as soon as they resume," Terkper told Reuters.
Ghana successfully issued a $750 million ten-year Eurobond in 2007 with an 8.50 percent coupon. It is trading at a yield of 4.96 percent, according to Tradeweb.