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THE GHANA 2013 EUROBOND TRANSACTION

Press Conference on 12 August 2013

GOALS
Diversify Sources of Funding
Consolidation of middle income status Decreasing flow of concessional financing

Reduce the debt service cost and rollover risk of the Ghana 2017 bond Reduce the cost of government financing
Current cost of domestic financing 19-21%

Improve tenor/length of financing the capital budget


Compare tenor of 3 or 5-year (or proposed 5-year) domestic bonds to the 10-year tenor for Sovereign Bond

PLANNED USE OF PROCEEDS

AMOUNTS INDICATIVE AREAS USD (MILL) % GHS % Counterpart funding for approved projects 102 10% 204 10% New Projects in 2013 Budget 307 31% 614 31% Early Redemption of Ghana 2017 Eurobond 250 25% 500 25% Refinancing of maturing Domestic debt 341 34% 682 34% Total 1,000 100% 2,000 100%
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THE PROCESS
Budget Proposal (March 2013) Cabinet approval (April 2, 2013) Parliamentary Approval (26 June 2013) Recruitment of transaction advisors (June 2013) Preparation of transaction documents (June -July 2013 Marketing of Bond (road show) (22 -25 July, 2013) Launch of Transaction (25 July 2013) Pricing (26 July 2013) Launch of bond exchange of fer (26 July 2013) Issue & Closing (7 August 2013)

TRANSACTION TEAM
Lead Managers (Citigroup, Barclays) Co-Managers (EDC Stockbrokers, Strategic African Securities) International legal counsel (Dentons) Local legal counsel (JLD & MB) Government of Ghana Transaction Committee ( MoF, Bank of Ghana)

ROAD SHOW
Ghanas investor roadshow was designed to be broad-reaching
The Republics had been absent from the international bond markets for the last six years There was a non-deal road-show in April 2013 (part of IMF/WB Spring meetings) and some periodic meetings with some investors

Two teams travelled to London, Frankfurt, Munich, Sam Francisco, Los Angeles, Boston and New York Ghana met with 58 investors via one -on-one meetings, group events or conference calls The Ghana team was represented by
Minister of Finance Deputy Minister of Finance Governor of Bank of Ghana Deputy Governor of Bank of Ghana Additional officials from both the Ministry of Finance Bank of Ghana
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THE GHANA CREDIT STORY


Despite current fiscal challenges, investors saw fundamental long-term value in Ghana reflected in: Governance
Political stability with strong institutions Good governance - Ghana consistently ranks in the Top 10 for African Governance (Mo Ibrahim Index) Good Business Environment Strong Reform agenda Public Financial Management, Financial Sector, Infrastructure

The Economy
One of the fastest growing economies in Africa A diversified economy Oil & Gas Prospects with sound revenue management under the Petroleum Revenue Management Act

TERMS OF THE TRANSACTION


ISSUER ISSUE RATINGS Republic of Ghana B1 Stable (Moodys) B+ Negative (Fitch) B Stable (Standard & Poor) Size Coupon Price Issue Date Maturity Date Proceeds Listing US$ 1 billion 7.875% 99.1515 7 August 2013 7 August 2023 $741,432,500 (after discount and estimated issue expenses) Irish Stock Exchange Ghana Stock Exchange (To be listed in August 2013)
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ANALYSIS OF RECENT AFRICAN SOVEREIGN ISSUES


ISSUER Ghana Nigeria RATING B1/B+/B BB-/BBBB-/BBRwanda Zambia B/B B+/B+ SIZE ISSUE ($MM) DATE 1,000 Aug 2012 500 July 2013 500 July 2013 MATURITY Coupon YIELD AT (YRS) (%) ISSUE (%) 10 5 5 7.875 5.125 6.375 6.625 5.375 8.000 5.375 6.625 6.875 5.625

400 May 2013 10 750 Sep 2012 10

Note differences among countries Ratings Timing or dates Size of offers Blend of offers (Nigeria) Tenor of offers Market conditions Processes
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COMPARISON OF COSTS
Nigeria
Higher credit rating Shorter maturity (5-Year)

Rwanda
Good market timing (May 2013) Before Bernankes announcement (Wednesday June 19) of likely tapering of quantitative easing resulting in interest rate hikes and high market volatility

Zambia
Good market timing (September 2012)

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SECONDARY MARKET QUOTES AUGUST 7, 2013


ISSUER Ghana Coupon (%) 8.500 MATURITY 2017

YIELD 5.65 8.06 4.52 5.97 8.13 7.03

Ghana
Nigeria

7.875
5.125 6.375

2023
2018 2023 2023 2022

Rwanda 6.625 Zambia 5.375

Secondary market trading indicates that Ghanas bond is well priced Rwanda (B) is trading at a higher yield than Ghana (B/B+) (8.13% versus 8.06%) Therefore Rwanda is NOT more creditworthy than Ghana Zambia is trading at a higher yield compared to Ghana 2017 (because of maturity dif ference Ghana 2017 has shorter maturity)
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INVESTORS WHO BOUGHT OUR BONDS


Summary of Order Book
Orders ($m) # of Orders Allocations ($m) Allocations (# of investors) Allocations to Local Institutional Investors ($m) $2,157 174 $750 158 $16.5 Europe 15% U.K. 21% Allocations by Investor Location Asia Other 2% 2%

U.S.A. 60%

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MANAGING OUR DEBT MORE EFFICIENTLY


Ghana became the first Sub -Saharan African country (excluding South Africa) to use the Eurobond market to manage its overall debt by:
Reducing cost Reducing the risk of rollover

Ghana 2017 is a bullet bond repayable in October 2017 Risk of high interest rate or uncertain market access Prudent to initiate an orderly retirement to reduce market risks of rollover

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REDUCING THE COST AND ROLLOVER RISK OF THE GHANA 2017 BOND
On 26 July 2013, one day after pricing of the new US$750m 7.875% notes due 2023 (the New Notes), Ghana launched an invitation to holders of Existing Ghana 2017 Notes to exchange their holdings for up to US$250m of new 7.875% notes due 2023 US$356m of Existing Notes were validly tendered This translated into and Exchange of $219 million face value of the Ghana 2017 The dif ference in interest costs between the Ghana 2017 bond (8.50%) and the new Ghana 2023 Bond (7.875%) translates into an estimated annual savings of $ 1 .375MM

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REDUCING THE COST OF DOMESTIC DEBT


The proposed refinancing of maturing domestic debt with Eurobond proceeds is justified in the dif ference in cost between domestic debt (19 23%) and the Eurobond (7.875%). Estimated annual interest savings after adjusting for exchange rate depreciation is GH21 48 million

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CONCLUSION
Ghana achieved its financing objectives with the transaction
Extended Ghanas maturity profile Reduced the rollover risk of the Ghana 2017 bond Raised cost effective funds to refinance high-cost domestic term debt Set a new benchmark and achieved a lower coupon than Ghanas debut 10-year USD bond Listing of notes on the Ghana Stock Exchange, facilitating access for local investors.
First sub-Saharan African country (excluding South Africa) to listed its Eurobond on the local stock Exchange Ghanaian institutional investors (banks, insurance companies, pension funds) participated in the offer.

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LOOKING AHEAD
Debt policy will be guided by the principle of financing capital expenditures with domestic and international long -term debt (the upcoming debut issue of a domestic seven -year bond reflects this policy) Project specific bonds will be raised for self -financing projects while general conventional bonds will be raised for other capital expenditures Ghana will continue to source concessional financing for social infrastructure.

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