The government will issue a Rwf15 billion five-year Treasury Bond (TB) under its quarterly issuance programme on February 24. 

According to the bond prospectus published by the National Bank of Rwanda (BNR) last week, the bond issue will finance infrastructure projects, and support the development of the local capital market. This will be the seventh bond to be issued the quarterly issuance programme.

John Rwangombwa, the central bank governor, said the quarterly bond issuance is part of the government efforts to raise money locally to fund the budget. Submission of bids for the TB opens on February 22 and closes February 24.

The bond’s coupon (interest) rate will be determined after the closure of the book-building process on February 24. The bond, whose redemption date is February 19, 2021, will be listed on the Rwanda Stock Exchange on March 1, according to Rwangombwa.

"This is an opportunity for local firms, individuals, co-operatives and SACCOs to invest in government paper that ensures a good return on investment...It can also be used as collateral to secure loans in the country,” Rwangombwa said.

He also said the previous bond attracted investors from different institutions, including individuals, SACCOs and banks, as well as off-shore investors.

Robert Mathu, the Capital Markets Authority chief executive officer, said the bond will boost operations on the country’s capital markets.

He added that the issuance programme provides long-term capital required to fund big projects.

"All the previous bond issues were oversubscribed, which means that there is a lot of appetite among the public to invest in government bonds,” Mathu said in a telephone interview yesterday.

The government issued a Rwf15 billion three-year bond in November last year. The TB was oversubscribed by 176.39 per cent.

It received 64 applications, of which 47 were retailers; 39 from individual investors and eight from Umurenge SACCOs. Retail investors accounted for 3.56 per cent of the total amount offered, an increase from 3.02 per cent in August and 1.4 per cent in November 2014. Banks represented 53.61 per cent of the applicants, while institutional investors were 42.83 per cent of the total amount offered.

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