Gov’t bond undersubscribed

Government has issued another treasury bond, generating Rwf1million less than the projected Rwf2.5 billion, according to the National Bank of Rwanda.
Francois Kanimba, the Governor of the National Bank of Rwanda
Francois Kanimba, the Governor of the National Bank of Rwanda

Government has issued another treasury bond, generating Rwf1million less than the projected Rwf2.5 billion, according to the National Bank of Rwanda.

This is the second treasury bond that government has issued this year following the Rwf2.5 billion bond with a maturity period of three years that was issued January.

Francois Kanimba, the Governor of the NBR said the previously issued treasury bonds were oversubscribed.
“This is an indication that very few people invest in long term securities,” said Kanimba.

The new bond will attract a coupon rate of 9.7 percent slightly higher than the previous one whose interest rate was 9.5 percent.

Kanimba noted that the interest rate increment is normal because the yield curve has always something to do with the maturity period.

With the expiry of the two treasury bonds that were listed on the Rwanda Over-The-Counter (ROTC) market in 2008, the government has decided to float more on the market in an effort to keep it active.  Government has not earmarked any specific project into which the proceeds will be invested.

“These are general bonds that the government issues periodically especially after the previous bonds maturing which are good for the Rwandan market,” explained Kanimba.     

In an earlier interview with the deputy governor of the Central Bank, Ambassador Claver Gatete, said that the issuing of these bonds is a sign that that the government is committed to support and develop the financial market giving people an opportunity to make long term savings through investing bonds and stock.

In 2008, government issued three treasury bonds that raised Rwf14.3 billion and this year, it expects to float bonds worth Rwf10 billion.

The Rwanda Over The Counter currently lists four treasury bonds, one corporate bond and one cross listing by Kenya’s KCB group.

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