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ACCRA, Feb 5 (Reuters) - Ghana drew strong demand for an issue of hard-currency debt, raising $3 billion in a eurobond auction that the government said on Wednesday was five times oversubscribed.
It sold $1.25 billion in seven-year bonds at a coupon of 6.375% in Tuesday’s sale, as well as $1 billion in 15-year bonds with a coupon of 7.875% and $750 million in 41-year paper with a coupon of 8.875%.
The 41-year paper is the longest-dated bond for an African country, the government said in a statement.
Simon Quijano-Evans, chief economist at Gemcorp Capital LLP in London, called the sale “a clear vote of confidence from the market... even if cash ratios do appear to be high among funds.”
The sale should encourage the government to press on with reforms in the run-up to a presidential election scheduled for the fourth quarter, he said.
Ample liquidity in financial markets and historically low interest rates among major central banks around the globe have seen borrowing costs come down in many emerging markets .
Ghana’s outstanding dollar-bond maturing in 2051 currently yields just over 8.6%.
The government statement cited Finance Minister Ken Ofori Atta as saying the lower debt yields reflected a reduced risk premium because of improving economic conditions in Ghana, which produces oil, cocoa and gold.
The West African nation has enjoyed some economic stability since the conclusion of a three-year International Monetary Fund loan programme last year, though the government expects economic growth to slow and the budget deficit to rise in 2020. (Reporting by Christian Akorlie in Accra and Karin Strohecker in London; Writing by Aaron Ross; Editing by Gareth Jones and John Stonestreet)