The central bank of Rwanda has announced it will on May 27, issue a treasury bond worth $14.5 million (Rwf10 billion), with a 10 years tenor.
The bond, expected to be oversubscribed, similarly to the previous six bonds worth Rwf 65 billion ($85 million) is part of the country’s policy to issue quarterly bonds on the Rwanda Stock Market.
“We have seen government bonds oversubscribed more than twice,”Celestin Rwabukumba, CEO for Rwanda Stock Exchange (RSE) told KT Press.
Initial bids are valued at Rwf50 million ($72, 000) for competitive bidders, while non-bidders prices are at Rwf100, 000 ($144).
No coupon rate has been announced yet, but brokerage firms suspect thebond could be over priced.
“I don’t think I can advise client to rush for it now,” Stephen Njoroge, operations manager at Faida Securities Rwanda Limited told KT Press this afternoon.
The Central Bank Governor, John Rwangombwa, says the interest on new bond will be subject to withholding tax at 5% to East African Community residents and 15% to non-EAC members.
This, Celestin Rwabukumba, says has “more to do with harmonizing East Africa Common Market protocols.”
Meanwhile, Rwabukumba is not yet sure of the percentage of the bond that will be given to foreigners and locals despite foreign investors expressing appetite for the products on the market.
Recently Kenya’s Equity Bank listed over 3.6 billion shares on Rwanda’s Stock Exchange (RSE), capitalising the market from $2.1 billion to $4.2 billion.
KT Press has also confirmed from a credible source that the recent MTN’s announced IPO will be issued before end of May.