Government faces ¢2.83bn 5-year bond refinancing with 26% foreign holdings

The government is faced with refinancing a ¢2.83 billion 5-year bond, maturing on November 28, 2022 with 26% of foreign holdings.

With the unfavourable pricing conditions, analysts expect the government to present a rollover offer.

This is expected to increase the cost of the financial instrument.

Also, the government will seek to raise ¢2.17 billion to refinance the upcoming Treasury bills maturities of ¢1.72 billion.

Meanwhile, for the first time in six weeks, the government exceeded its auction target. It accepted all bids and raised GH¢1.66 billion in the process.

It also exceeded its refinancing obligation by 54%.

Analysts believe the excess uptake will provide some buffer to address future auction shortfalls.

Despite improved demand, yields went up by more than 35% The 91-day and 182- day tenors went for 35.20% and 35.99%.

Bond market activity picks up

Activity on the secondary bond market picked up last week as aggregate turnover rose by 8.07% week-on-week to ¢3.19 billion.

Though the front end of the yield curve saw more trading activity, yields increased by an average of 2% as selling interest dominated the market.

Analysts expect a topsy-turvy bond market this week as investors remain defensive with lingering uncertainty as the market awaits the Debt Sustainability Analysis report.