Third government bond oversubscribed

The government, through the National Bank of Rwanda has issued another treasury bond on the primary market generating Rwf5.1 billion more than the targeted Rwf2.5 billion.
Francois Kanimba governor of BNR (File photo)
Francois Kanimba governor of BNR (File photo)

The government, through the National Bank of Rwanda has issued another treasury bond on the primary market generating Rwf5.1 billion more than the targeted Rwf2.5 billion.

The bond, that was issued, last week, is the third government has issued this year, following the previous two, that were worth Rwf5billion in January and May respectively. 

“Last week’s bond was very successful since we registered an over-subscription of Rwf7.6 billion against our target of Rwf2.5 billion,” said Francois Kanimba the Governor of the Central Bank.

The bond carries a coupon rate of 9.5 percent which is slightly above the 9.4 percent of the market rating and it will mature after a period of two years.

Kanimba also said that the over-subscription means that there is enough liquidity in the system and it is the right time for institutions to raise capital through investing in government bonds.

“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, Kanimba said that the issuing of these bonds is a sign 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.

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.

The overwhelming demand for this bond comes to bridge the gap that had been left behind by the previous bond in May which was undersubscribed by Rwf1 billion.

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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