23 February 2018

Rwanda: Banks Dominate Govt's Rwf15 Billion Five-Year Bond Issue

Banks were allocated the biggest share of the government's Rwf15 billion five-year Treasury bond issued yesterday, according to National Bank of Rwanda (BNR). The TB was oversubscribed at 263 per cent, one of the highest subscription rates ever.

A statement from the central bank indicates that 107 applications were received from different categories of investors, with banks being allocated the 46.7 per cent of the total issued amount. Institutional investors were allocated 41 per cent, while the remaining 12.3 per cent was allocated to retail and individual investors. However, this is an increase in allocations for retail investors compared to 10.1 per cent share they got in Rwf10 billion 7-year TB issued in November 2017. The November issuance received a subscription rate of 178.14 per cent or 66 applications.

According to BNR, of the 107 applications received, 80 bids were from retailers, while 20 were from institutional investors and seven for banks.

"The successful issuance is attributed to current favourable macroeconomic conditions and continued joint efforts in public awareness campaigns across the country in a bid to encourage Rwandans to invest in risk free Government securities," John Rwangombwa (pictured left), the central bank chief said in the statement.

The bond's coupon rate was set at 11.80 per cent through a book-building method. The Treasury bond's interest will be paid semi-annually, according to BNR. The TB will be listed on Rwanda Stock Exchange's secondary market on Tuesday February 27, according to the statement. Its redemption date is 17/02/2023. The next bond issuance for this financial year will be on May 23 for a 10-year Treasury bond, BNR said.

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