The Rwf15 billion Treasury bond has been oversubscribed by 232 per cent, the highest ever subscription recorded by any government bond, receiving bids worth Rwf34.8 billion.

The National Bank of Rwanda (BNR) received 91 bids for the bond issued on Wednesday from different categories of investors compared to 56 for the February issuance.

Retail investors, including small and medium enterprises (SMEs) and individuals, increased to 39 from 29 in the previous issuance.

Over 6.1 per cent of the total bids were from foreign investors from Canada, France, Belgium, Mauritius, Kenya and Tanzania.

Central bank governor John Rwangombwa said the bond’s final price was 12 per cent with a coupon rate of 11.875 per cent yesterday.

"The initial guidance price was announced at upper 11 which was later revised to 11.875 per cent,” Rwangombwa told journalists in Kigali yesterday.

The Minister for Finance and Economic Planning, Amb. Claver Gatete, said the success of the treasury bond indicates investors’ confidence in the macro-economic framework and Rwanda’s economic direction.

"To have this bond subscribed by 232 per cent with wide participation is a clear indication of how investors perceive our economy. Our aim is to ensure that we keep this trend by continuing our prudent macroeconomic policies,” Gatete said.

He also attributed the success of the issuance to the far-reaching public awareness campaigns that were conducted through countrywide road shows by teams from BNR, the ministry, Capital Markets Authority and the Rwanda Stock Exchange.

The bond issuance is in line with the renewed government commitment to revive the bond market and to promote the culture of mobilising long-term savings through the securities market.

The bond is the third in a series of local Treasury bonds issued by government to fund infrastructure projects in the Budget.

Minister Gatete reiterated that the government is planning regular issuances of government bonds. 

The next issuance is slated for November this year. In addition to that, Gatete said government would go to the international bond market next year after identifying how much is needed for the country’s major infrastructure projects like Bugesera International Airport.

In 2013, Rwanda raised $400 million from the Eurobond it issued and the proceeds were spent on expanding the national carrier RwandAir’s fleet, as well as completion of the Kigali convention centre and the Nyabarongo hydro power project.

Alex Kanyankole, chief executive of Development Bank of Rwanda, said the investors of the Rwf 15 billion Treasury bond were riding on the confidence built by the recent upgrade of Rwanda’s Fitch Ratings from B to B+.

"People have come to realise that these public sector bonds are risk-free. So it’s a place where you place your money and just wait for the maturity period to get back your money together with interest,” he said.

Kanyankole added that there was still a lot of potential in mobilising savings from the public, especially from SMEs.

In spite of the praiseworthy bond results, RSE chief executive Celestin Rwabukumba said many people thought the closure of the bond’s trade in the primary market (BNR) was the end, urging them to up their participation when the bond comes to the secondary market on September 2.

"What follows is the allotment process which we hope to complete tomorrow (today) and have the bond listed on the stock exchange next week. We are looking forward to increased secondary market participation,” Rwabukumba said.