Thursday, December 24, 2015

Ghanaian Parliament finally approves $1 billion Eurobond after a heated session

Parliament has finally approved a new $1 billion Eurobond, after disagreements on floor of the House on Tuesday prevented Members of Parliament (MPs) from going on recess.

The MPs could not break for Christmas because of a rumpus in the House over a vote on the Eurobond.

Proceedings in the House were suspended for several hours on Tuesday after Minority MPs kicked against a decision by the presiding Speaker, Ebo Barton Oduro, to nullify a crucial vote on the Eurobond.

A head count after an earlier voice vote showed 67 Minority MPs voted to reject the Eurobond whereas 66 Majority MPs voted in support of the motion.

But the first Deputy Speaker intervened and ruled the vote as “an exercise in futility” after citing constitutional provisions to argue that the House did not have the required minimum number of MPs present in the chamber for a vote.

The decision sparked Minority outrage and forced suspension of proceedings for several hours.

When the MPs resumed sitting on the matter on Wednesday, the approval was done through a voice vote, giving Finance Minister Seth Terkper the green light to go back to the international market to  issue another Eurobond.

The Minister in 2015 alone, led four Eurobond issues, the last one, the $1 billion in October.

The yield for the October issue was 10 .75% as against the 11.5% investors demanded.

However at 10.75%, the yield on the bond is still much higher than government’s initial target of 8.5% and also higher than the previous one which had coupon rates of 8% and 8.5% percent for its $2 billion bond issued.