UPDATE 1-Ghana to issue 500 mln cedi 3-yr bond Oct. 25

* purely restructuring move

* issue expected to be heavily oversubscribed

(Adds quotes, details)

ACCRA, Oct 8 (Reuters) - The Bank of Ghana will issue 500million cedis ($264.6 million) worth of three-year governmentbonds on October 25 to restructure short-term debt, FinanceMinister Kwabena Duffuor said on Monday.

"It's purely debt management and is targeted atrestructuring our short-dated instruments such as the 91-day and180-day bills," Duffuor told Reuters.

The West African cocoa, gold and oil exporter has issued aseries of three-year and five-year bonds this year to raisefunds for infrastructure for debt management.

The bonds, which have been heavily oversubscribed, were alsopart of efforts by the central bank to mop up liquidity insupport of the local cedi currency , under pressure fromlocal dollar demand.

The yield on Ghana's short-term instruments, including its91-day bill, is around 23 percent - almost at the same level asthe yield for three-year bonds.

"As it is now, we're facing a flat yield curve and need tofix that effectively," Duffuor said, adding he expected theupcoming bond to be oversubscribed.

(Reporting by Kwasi Kpodo; Writing by Richard Valdmanis;editing by Ron Askew)

((richard.valdmanis@thomsonreuters.com)(+221 33 864 5076))

Keywords: GHANA BOND/

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