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Rwanda Issues 3-Year Rwf15 Billion Bonds

by Oswald Niyonzima
8:08 am

National Bank of Rwanda

Rwanda will issue a 3-year treasury bond worth Rwf 15 billion this month to finance infrastructure projects and capital market development, Central Bank (BNR) announced on Thursday.

“The National Bank of Rwanda would like to inform the public that on behalf of the Rwanda Government, BNR will issue a 3-Year Treasury Bond worth 15 billion during the period of 19th to 21st November 2018,” the Central Bank said in a Press statement today.

According the release, BNR will open door to bidders on November 19th and close on November 21st, 2018.

Meanwhile, the coupon will be determined at close of book building on November 21st, 2018 at 4.00PM Kigali time and successful bidders will be paid interest at six semi-annual dates from May 24th, 2018 to November 19th, 2021 as determined by the Central Bank.

Bidders will buy bonds via Central Bank through a book building method whereby the minimum for competitive bid is fixed at Rwf50 million and Rwf100,000 for non-competitive bids.

“Price will be quoted by competitive bidders using the yield to three decimal places,” BNR said revealing that the bonds will be listed on Rwanda Stock Exchange (RSE) and the second trading in multiples of Rwf100,000 will commence on Tuesday November 27th, 2018 on RSE.

“National Bank of Rwanda will rediscount the bonds as last resort at 3% below the prevailing market yield or coupon rate whichever is high, upon written confirmation that there is no buyer from the RSE,” BNR disclosed, adding, however, that the interest will be subject to withholding tax at the rate of 5%.

The Central Bank also revealed that to qualify for the bonds, you must be a Rwandan resident or a non resident with a Central Security Depository (CSD) account opened through licensed commercial banks or capital market intermediaries, requiring all wishing investors to fill an application form which can be found on the central bank’s website (www.bnr.rw).

BNR also noted that the allotment process of the bonds is based on two categories, including retail domestic investors and institutional (domestic and regional) investors.

While global results issue will be published on BNR website, the Central Bank will notify successful bidders through their emails on November 21st, 2018.

Since all bids must be submitted to the Central Bank through any of registered commercial banks and capital market intermediaries, the Central Bank reminds that commercial banks are “responsible for setting their own successful bids and their clients’ bids.”

A T-bond selling is a normal Rwanda Government exercise since 2008 in a bid to mainly finance big infrastructure projects.

This is the 3rd time; Rwanda Government has issued bonds this year. The last bid was in May this year where the Government sold a ten-year Treasury bond worth Rwf10 billion while in February it rolled out a five year Rwf 15 billion T bond.

RSE statistics currently show that the Market capitalization stands at $3.3 billion or 40 percent of Rwanda’s Gross domestic Product (GDP) with over Rwf500 billion exchanged hands.

At least 17000 investors have been solicited in the period since the establishment of RSE ten years ago, according to statistics.