GH Vodafone 9:33 PM Back Trial Questions EMBA2018 The fourth Ghana Eurobond was successfully issued at 10.75%. A spokesperson said "The bond is a soft amortizing one with tenure of 15 years amortising in years 2028, 2029 and 2030. The principal will be repaid in three instalments of USS333 million in years 2028 and 2029, and USS334 million in 2030. The 15 year tenure means that Ghana has become the first sub-Saharan African country outside South Africa to successfully issue a 15-year bond." It was further reported the bond was highly oversubscribed by A couple of weeks before Ghanas Eurobond, Zambia issued its bond at 9.38%. Government has blamed the higher yield on the bond on turbulent global conditions, whilst other analysts believe the higher yield is a reflection of the weak political economic fundamentals of the economy Required What is the annual explicit cost of the Eurobond in nominal terms (annual dollar cost)? (6 Marks) b) What other implicit costs can you deduce from the Eurobond as well as the effective maturity of the bond? (6 Marks) e) To what extent do global and weak political and economic fundamentals of the country explain the higher yield on the Eurobond? (6 Marks) What are Eurobonds, and to what risks are investors exposed? How does the World Bank's partial guarantee (40% of the face of the bond) moderate these risks? (7 Marks) GH Vodafone 9:33 PM Back Trial Questions EMBA2018 The fourth Ghana Eurobond was successfully issued at 10.75%. A spokesperson said "The bond is a soft amortizing one with tenure of 15 years amortising in years 2028, 2029 and 2030. The principal will be repaid in three instalments of USS333 million in years 2028 and 2029, and USS334 million in 2030. The 15 year tenure means that Ghana has become the first sub-Saharan African country outside South Africa to successfully issue a 15-year bond." It was further reported the bond was highly oversubscribed by A couple of weeks before Ghanas Eurobond, Zambia issued its bond at 9.38%. Government has blamed the higher yield on the bond on turbulent global conditions, whilst other analysts believe the higher yield is a reflection of the weak political economic fundamentals of the economy Required What is the annual explicit cost of the Eurobond in nominal terms (annual dollar cost)? (6 Marks) b) What other implicit costs can you deduce from the Eurobond as well as the effective maturity of the bond? (6 Marks) e) To what extent do global and weak political and economic fundamentals of the country explain the higher yield on the Eurobond? (6 Marks) What are Eurobonds, and to what risks are investors exposed? How does the World Bank's partial guarantee (40% of the face of the bond) moderate these risks? (7 Marks)
