The Home Finance Company, Ghana's premier mortgage finance institution, has introduced a new five-year dollar bond - HFC's Series 'C' - which is fully guaranteed by CAL Merchant Bank.

HFC received the guarantee in the form of a cheque for two million dollars by CAL Bank, representing the total amount expected to be raised under the sale of the securities.

Hitherto, HFC had raised 4.7 million dollars under similar arrangements of HFC Series 'A' and 'B'.

The Company has a long-term plan of raising about 35 million dollars under such arrangements to refinance existing foreign mortgage portfolios.

With an annual interest yield of 8.25 per cent, the sale of the new bond will be the sole responsibility of CAL Bank which will ensure that the bonds are sold to investors irrespective of market conditions.

"In HFC's case, CAL Merchant Bank was pleased to underwrite the issue because of the company's excellent reputation and solid financial credentials," Mr. Jude Kofi Bucknor, Managing Director of CAL Merchant Bank, told Journalists at a press conference in Accra.

Though the Bank is guaranteeing the issue and assumes the risk of the possibility of the bonds not being sold, the success depends on the quality, reputation and standing of HFC and the Bank, Mr. Bucknor said. "CAL Merchant Bank is now in the process of selling down these bonds to investors, based on HFC's strong credit quality and attractive interest rate," HFC started operations in 1991 with 10 million cedis. It is net Worth is 12 billion cedis. Mrs. Stephanie Baeta-Ansah, Managing Director of HFC said, "We have a mortgage portfolio of almost 50 billion cedis and manage authorised funds with a total fund value of almost 25 billion cedis," She said the HFC mortgage portfolio continues to grow and this calls for a balanced match between its mortgage assets and liabilities.

"This calls for careful debt management policies especially in our part of the world where interest rates have been quite erratic," Mrs. Baeta-Ansah said.

She explained that the issue was the first in the country to be fully guaranteed by a Merchant Bank and commended CAL Bank for a "very bold initiative towards the development of the capital market in the country."

The bonds, according the CAL Bank, will be sold to a wide-range of individuals and institutional investors through the Ghana Stock Exchange.