Ghana Cocoa Board (COCOBOD) successfully raised GHS 3.4 billion through its inaugural commercial paper issuance. This amount falls approximately GHS 604 million short of the indicative GHS 4 billion target presented to investors. The funds were secured via Cocoa Capital PLC, a new wholly-owned company established by COCOBOD to borrow from investors under its domestic financing programme.
The GHS 3.4 billion raised represents about 85% of the initial GHS 4 billion financing plan for this first tranche. The notes were issued on October 5, 2026, and will mature on June 28, 2027. The final yield, or return for investors, was 11%, which was at the upper end of COCOBOD's initial guidance of 10.5% to 11%. This suggests investors demanded a higher return than the lower end of the initial range.
This issuance is a crucial step in COCOBOD's broader strategy to diversify its funding sources and reduce reliance on traditional international syndicated loans. The domestic financing programme aims to raise up to GHS 16.3 billion in total, with GHS 14 billion earmarked for financing cocoa purchases through commercial paper. The remaining GHS 2.3 billion is intended for longer-term bonds to refinance existing debt. This shift is significant for Ghana's cocoa sector, which is vital to the national economy.
Deputy Chief Executive in charge of Finance and Administration, Ato Boateng, indicated COCOBOD could return to the market shortly. Speaking on Channel One TV on September 28, he mentioned a potential second tranche within two weeks of the first issuance. This suggests a continuous effort to meet the overall funding objectives. However, the initial results do not clarify whether investors offered less than expected or if COCOBOD rejected bids at higher rates.
The issuance faced some delays, with the notes being issued on October 5, 2026, four calendar days later than the initially planned October 1, 2026. The duration of the notes was also slightly reduced from 270 days to 266 days. These adjustments, alongside the 15% shortfall, raise questions about COCOBOD's ability to secure funds precisely on its preferred terms and schedule. The full bidding results, which would show how much investors offered, have not been disclosed.
A key unresolved question remains how the GHS 3.4 billion will be used. While the investor presentation assigned commercial paper proceeds to cocoa purchases, the issuance announcement also listed repayment of a bridge loan. This loan was obtained to refinance COCOBOD’s legacy debt. The latest notice does not specify the allocation between cocoa purchases and debt repayment. The prospectus states that details of bridge funding should be in the relevant pricing supplement, which was not available as of October 8.
The success of future tranches will depend on investor confidence and COCOBOD's ability to offer attractive terms. The market will closely watch how COCOBOD manages its subsequent issuances and clarifies the use of funds. This initial offer provides a benchmark for future fundraising efforts. Ghana's cocoa sector, a major foreign exchange earner, relies heavily on COCOBOD's financial stability and efficient operations. The transparency around these financial instruments will be key for investor relations and market confidence.