The government will issue a five-year Treasury bond worth Rwf15 billion at the end of this month, a bid notice by the National Bank of Rwanda (BNR) indicates.
The TB issuance programme is part of a plan by government to develop the local capital market, as well as fund infrastructure projects as the country seeks to reduce its dependence on aid to finance its national budget, central bank said in the Thursday notice.
The bond will be the third TB for this year under the government’s quarterly bond issuance programme launched in 2014. The bond will be issued through the book-building method, and its redemption date is 20/08/2021
The central bank advised interested bidders to open central securities depository (CSD) accounts through licenced commercial banks or capital market intermediaries, through which they will also submit their applications to the central bank. Bids for the bond, whose coupon will be determined by the market, will be received from August 22 to August 24.
The bond will be listed on the Rwanda Stock Exchange on August 30, according to the bid notice.
During the last bond issuance in May, retail investors dominated with 48 orders of the 57 applications received by BNR for the Rwf10 billion 15-year Treasury bond issued on May 25. This represented 14.61 per cent of the total amount offered, up from 9.77 per cent in February. Institutional investors and banks were allocated 50.39per cent and 35 per cent, respectively.
Retail investors in bonds have increased from one per cent in February 2014 to 9.8 per cent in February this year. Institutional investors constituted 53.2 per cent in the February bond issue compared to less than 10 per cent in 2014.
The bond market recorded a huge 910.6 per cent growth in revenue in the first six months of the year, raking in Rwf514.5 million from Rwf470.7 million worth of bonds over the reporting period.
The good performance is a result of government’s efforts aimed at encouraging Rwandans to invest in bonds over the past one and half years.
The drives that are part of the government’s quarterly TB issuance programme have seen the participation of retail investors, including SACCOs grow significantly from about one per cent in 2014 to 14.6 per cent in May. Institutional investors and banks accounted for 50.39 per cent and 35 per cent participation rate, respectively. Institutional investors were less than 10 per cent in 2014.