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.
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.