The National Bank of Rwanda (NBR) has announced plans to reopen a 20-year treasury bond to consolidate and raise long term capital for government projects in the post COVID-19 pandemic.
“On 24th March 2021, Rwanda Government through Central Bank will reopen the 20 year Treasury bond (worth Rwf20billion),” NBR said on its twitter page.
The upcoming bond (N° FXD 6/2020/20YRS) was first floated to the public on August 20, 2020, attracting good investors’ appetite with 149.6% subscription level, NBR stated.
NBR explained to KTPress that the re-opening is done for the purpose of market development; give investors in the market another investment opportunity but also give the bond a current market price- which is by the market players.
The Central Bank also said that this will pave way for Bond consolidation and increase liquidity in the secondary market.
“Instead of having so many scattered bonds, bond reopening allows having few bonds but with enough volume which increases the chance of being traded on the secondary market,” NBR said this Friday March 19, 2021.
Central bank said proceeds from bond issuances (new) and reopening are credited (given) to the Government’s account (Ministry of Finance) in order to continue steering different projects for capital market development.
The National Bank of Rwanda on behalf of the Government of Rwanda invited bids for reopen Twenty Year Fixed Coupon Treasury Bond.
The bond will reopen on 24 March 19, 2021 and its settlement date set on March 26, 2021. It will have 13.150% per annum coupon repayment which will be valid for completion (Redemption Date) until July 27th, 2040.
The bond is open resident and non-resident who have licensed accounts used as a deposit of an individual’s or corporation’s money (CSD account) and application will be through a book building method with Competitive bids at Rwf50million and Non-competitive bids Rwf100, 000.
The allotment process is based on the following categories: Retail investors (Domestic) and Institutional investors (domestic and regional).
The benchmark bond is listed on Rwanda Stock Exchange (RSE) and secondary trading in multiples of Rwf100,000 will commence on Tuesday 30/03/2021 on the Rwanda Stock Exchange (RSE) and all investors will be subject to withholding tax at the rate of 5%.