The government will issue its next Treasury bond on November 26, the bond’s prospectus from the central bank indicates.

The bond, valued at Rwf15 billion will have a seven-year tenure. The proceeds will be used to fund infrastructure projects and facilitate capital markets development just like the previous two, the prospectus shows.

Its coupon rate will be determined once the book building process is complete at 4pm on November 26.

The National Bank of Rwanda (BNR), which is the primary issuer, will be receiving bids for a minimum of Rwf100,000 for individuals, while companies will enlist for competitive bids of up to Rwf50 million.

The prospectus indicates that both residents and non-residents with a central securities depository account at the central bank opened through licensed commercial banks or capital market intermediaries are eligible to bid for the bond.

"Successful bidders will know their results through email and interest payments will be done twice a year,” it added. However, the interest will be subject to a withholding tax of 5 per cent for East African Community residents and 15 per cent for international clients.

This will be the second bond issued by government this fiscal year, and the third this calendar year. It will be listed on the Rwanda Stock Exchange on December 2 this year.

There are six fixed income securities trading at the bourse, including two corporate bonds from I&M Bank and the World Bank’s International Finance Corporation Umuganda bond.

The government started the bond issuance programme in 2008, but hit a snag the same year due to the global financial crisis. It resumed issuance in 2010 and 2011, with small issuances of Rwf2.5 billion each.

It, however, stopped the programme opting to focus on Treasury bills, especially last year after some donors suspended aid. It was to enter the bond market with the hugely successful Eurobond issuance last year.

This year, the government has so far issued two Treasury bonds under the quarterly issuance programme; the Rwf12.5 billion three-year bond issued in February and the August issue of Rwf15 billion, which fetched a coupon rate of 11.875 per cent.

ben.gaosre@newtimes.co.rw