New bond set for next week 

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New bond set for next week 

With the need to finance pending infrastructure projects that will enable the country to achieve its 2017 EDPRS2 targets, the government through the Central bank is set to issue its second bond in the coming week.

According to the central bank statement, the Treasury bond coupon rate will be determined once the book building process is complete at 4pm on Wednesday next week.

The National Bank of Rwanda (BNR) is the primary insurer, but once the allotment process is complete, the bond will be approved to trade in the secondary market, the Rwanda Stock Exchange.

Individual bids begin at Rwf100, 000 for individual investors. While companies will enlist for competitive bids at a premium of Rwf50 million

The government started its quarterly Treasury bond issuance in February with Rwf12.5 billion that was oversubscribed by 140 per cent.

Its redemption date is August 30, 2019.

Any resident and non-resident with a central securities depository account at the central bank (opened through licensed commercial banks or capital market intermediaries) are eligible to bid for the bond.

Successful bidders will know their results through email on Wednesday and interest payments will be twice a year.

The interest will be subject to a withholding tax of 5 per cent for East African Community residents and 15 per cent for international clients.

Alison Munyagwa of Africa Alliance brokers was buoyant about the new bond citing the increased attractiveness to invest in Rwanda.

“The more bonds we have in the market, the more customers will come to bargain and buy it,” he said.

It will be the fifth government bond at the bourse in the recent past; following two other corporate bonds of I&M Bank and the International Finance Corporation.

 

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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.

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