* Sale provides badly needed funds to balance 2016 budget
* Conclusion of Ghana's 3rd IMF review delayed
* President John Mahama faces opposition leader in crucial
(Adds analyst comments, context)
By Kwasi Kpodo
ACCRA, Sept 8 Ghana issued a $750 million
Eurobond on Thursday at a more favourable yield of 9.25 percent
compared to its last sale, officials said, bringing in badly
needed cash to balance the government's budget before elections
Finance Minister Seth Terkper told Reuters that Thursday's
sale was oversubscribed with orders exceeding $4 billion,
reflecting investor confidence in the economy after news that
oil is now flowing from a new well.
"A month ago, we hadn't commissioned a new (oil field). ....
The fact that the president has commissioned it now and around
25,000 (barrels per day) of oil is coming tells the investors we
are keeping our word," Terkper said in an interview.
The West African country aborted an earlier attempt to
launch the bond in August because investors were demanding
higher than expected yields after Ghana's parliament passed a
law allowing central bank financing contrary to IMF
Ghana's fifth bond, which will mainly be used to refinance
a 2017 debt issue, has a weighted average life of five years
with three equal repayments in 2020, 2021 and 2022, the
Bank of America Merrill Lynch, Citigroup and Standard
Chartered are the leads. Ghana is rated B3/B-/B.
Economists previously said the government might struggle to
sell the bond, given Ghana's economic problems.
Ghana, which also exports cocoa and gold, signed a
three-year aid deal last year with the International Monetary
Fund (IMF) to restore fiscal balance to an economy dogged by
deficits, public debt, high interest rates and inflation.
The IMF said this month that although Ghana has made
progress under the programme, there were outstanding issues that
must be resolved before the country would receive its next
Thursday's yield compared with 10.75 percent for a 15-year
$1 billion sale last year and improved on offers a month ago.
Alongside, Ghana also announced a further tender of its 8.5
percent 2017 notes and Terkper said the government was aiming to
buy back about $400 million after it bought back around $100
million last month.
President John Dramani Mahama is seeking a second term in
what is expected to be a tight race between him and main
opposition leader Nana Akufo-Addo who had expressed doubts over
investor interest in the bond.
Some analysts believe the sale only reflected a general
growing appetite among fund managers for high-yielding emerging
market assets, and not because Ghana's conditions had improved.
"The models have been generally trending downwards due to
external developments rather than Ghana's own internal
developments. It's a lucky window and its good they (Ghana) went
in," Joe Abbey, chief economist of the Accra-based Centre for
Policy Analysis, told Reuters.
(Reporting by Kwasi Kpodo; Editing by Eric Meijer)