Rwanda: Gov’t Issues Double Rwf15 billion Bonds for End of Year

Rwanda’s Central Bank.

Rwanda’s Central Bank (BNR) is set to issue two bonds consecutively with a chance for potential investors to tap into both.

One of the bonds will be for three (3) years and another for seven (7) years, worth Rwf15billion ($16.149 million) each. Central Bank announced that both bonds will be issued at an interest (subject to 5% withholding tax) to the year 2020 on competitive and non-competitive bids worth a minimum of Rwf50m and Rwf100,000 respectively.

The market will be open from Monday 18th to Wednesday and close on 20th November 2019, the Central Bank said in a recent public communiqué, adding that investors can bid in one or both bonds.

So far, 21 bonds (worth billion francs) in total have been rolled out to the public since 2014 when the government took a firm commitment to issue bonds on a quarterly basis with various maturities periods ranging from five, seven, ten, fifteen and recently introducing a 20-year lifespan bond.

The issuances were aimed at financing the country’s major infrastructure projects such as the construction and upgrade of the Bugesera and Kigali International airports, road networks, among others.

According to Central Bank Governor John Rwamgombwa, there has been an increased appetite in the uptake.

The subscription rate has apparently grown, from 2014 up to June 2019; with the average subscription of 197.1%, with one of the highest seen in a 5-year Rwf10bn Treasury Bond that was oversubscribed by 222 per cent in 2017.

In a turning point, the first-ever 20-year Treasury bond worth Rwf15billion issued in August this year yielded a remarkable subscription level of 141.03% from 80 applications received from different categories of investors.

In the above bond, institutional investors got an allotment of 47.39%, followed by banks getting a 37.64% allocation while individuals and retailers managed to secure 14.9% of the total issued amount.

“The successful issuance is attributable to favourable macro-economic conditions and coordinated efforts in public awareness campaign across the country in a bid to sensitize Rwandans to invest in risk-free government securities,” Central Bank Governor, John Rwangombwa said in an earlier statement.

Capital Market Authority, (CMA) and Rwanda Stock Exchange (RSE) encourage Rwandans to buy and save in secondary bonds from retailing agents and figures indicate that over 16,000 persons have subscribed with saving amounting to Rwf525.8 billion between 2011 to July 2019.

Ahead of this year’s issue, apparently, the numbers of bonds issuances and re-issuances have increased to more than four – which were issued each year in the last five years.

Commenting on the continued oversubscription of the bonds, Eric Bundugu, the Acting Executive Director of Rwanda Capital Market Authority (CMA) said: “The continued oversubscription reflects a huge demand for such products by both the individual and institutional investors. Individual investors’ participation is currently covering an average of 10.2% of issued bonds, from nothing when the regular issuance started in 2014.”




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