COCOBOD asks investors to fund cocoa purchases, but proceeds may also repay old debt
COCOBOD’s first commercial paper offer under its GH¢16.3 billion Cocoa Notes Programme may be used to repay a bridge loan taken out to refinance existing debt, despite being presented to investors as a way to fund cocoa purchases.
The Ghanaian Cocoa Board (COCOBOD) has launched its first commercial paper offer as part of the GH¢16.3 billion Cocoa Notes Programme. However, the funds raised may also be used to repay an existing bridge loan, despite being marketed as a means to finance cocoa purchases. This distinction was clarified in an investor presentation earlier this month.
The program earmarks approximately GH¢14 billion of short-term commercial paper for cocoa purchases, while GH¢2.3 billion of longer-term bonds is allocated for refinancing existing cocoa obligations. The investor presentation did not explicitly inform potential investors that commercial paper proceeds could be used to repay a bridge facility linked to legacy debt.
The prospectus, released post-presentation, includes a clause allowing proceeds from commercial paper or bonds to first repay bridge funding obtained prior to any issuance. It states that the funds must align with the program's permitted uses, with the details to be disclosed in the relevant pricing supplement. Yet, the prospectus lists cocoa purchases as the primary use for commercial paper proceeds and legacy debt repayment as the main use for bond proceeds, creating ambiguity.
On September 25, COCOBOD announced the issuance of 270-day commercial paper, specifying two uses for the funds: financing COCOBOD's cocoa purchases and repaying the bridge facility obtained to refinance its legacy debt.
Written by urgent.news from MyJoyOnline Ghana's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
