The government is back on market seeking to raise Rwf20 billion through a 20-year Treasury bond to among others fund government projects in the post Covid-19 pandemic, according to the central bank.
Bids for the bond, whose coupon will be determined by book building, will be received from March 24 (this Wednesday) and its settlement date set on Friday, March 26.
"On 24th March 2021, Rwanda Government through Central Bank will reopen the 20 year Treasury bond (worth Rwf20billion),” the Central bank said in a tweet last week.
The institution noted that the upcoming bond (N° FXD 6/2020/20YRS) was first floated to the public on August 20, 2020, attracting good investors’ appetite with 149.6% per cent subscription level.
The reopening however, is done for the purpose of market development; giving investors in the market another investment opportunity but also give the bond a current market price- which is by the market players.
In addition the bank highlighted that the move is expected to pay way for bond consolidation and increase liquidity in the secondary market.
The Central Bank also said that this will pave way for Bond consolidation and increase liquidity in the secondary market.
"Instead of having so many scattered bonds, bond reopening allows having few bonds but with enough volume which increases the chance of being traded on the secondary market,” a reliable source from BNR told the media.
The Treasury bond sale is under the government’s quarterly issuance programme that started in 2014 to raise money to fund infrastructure projects.
The programme also seeks to develop the local capital market.
The bond will have 13.150% per annum coupon repayment which will be valid for completion (Redemption Date) until July 27th, 2040.
However, interest will be subject to withholding tax at the rate of 5 per cent for EAC residents and 15 per cent for non-EAC residents.
The allotment process is based on mainly; Retail investors (Domestic) and Institutional investors (domestic and regional).
All investors are therefore required to complete bond application forms available on the National Bank of Rwanda website.