Government issues Rwf 15 billion Treasury bond

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The government through central bank has issued a five year treasury bond worth Rwf 15 billion through a book building method.

The bond that is expected to be issued on August 26 this year will be listed on the Rwanda Stock Exchange.

John Rwangombwa Governor of the National Bank of Rwanda

John Rwangombwa Governor of the National Bank of Rwanda

According to John Rwangombwa, the Governor of Central bank, the bond will help raise funds for infrastructure projects as well as development of capital market.

“All bids must be submitted to National bank of Rwanda through any of the licensed commercial banks or stock market intermediaries,” governor Rwangombwa said.

Rwangombwa says that commercial banks will be responsible for settling their own successful bids and successful bids of other bods submitted through them.

“The price will be quoted by competitive bidders using the yield to three decimal places,” the governor said adding that the bond is open to both international and local investors.

The bond follows the government’s plan to issue regular quarterly bond issuance every year. The government successfully issued a 10 year treasury bond worth Rwf 10 billion which was the second this year.

The issuance which was a success with a subscription level of 228.19% and the number of retailers increasing from 22 in February 2015 to 32 in May, 2015 creating another optimism that the August   issuance is likely to attract over subscription.

While secondary trading in multiples of Rwf 100,000 will commence on Tuesday on 1 September, 2015 on Rwanda stock exchange.

Central  Bank  says that  the  minimum amount for competitive bids will  be  Rwf50  million while noncompetitive  bids  stand at Rwf 100,000  and further  says that   it(central bank) will rediscount  bonds  as  a  last resort at 3 percent  above the  prevailing  market or  coupon  rate whichever   is higher.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

More posts by | Visit the site of Ndaka

 

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