Development Bank of Rwanda (BRD) has successfully issued its second tranche (Series II) Sustainability Linked Bond ("SLB”) that attracted subscriptions of Rwf39.05 billion from local and international investors, against a target of Rwf30 billion.
Mass education and meticulous engagement with target investors as well as the underlying features of the Series II SLB once again ensured high subscription levels at 130.2%.
The oversubscription provision in the bond terms enabled BRD to tap into an additional Rwf3.5 billion in addition to the proposed Rwf30 billion target issue size.
Consequently, the Series II SLB closed at an issue size of Rwf33.5 billion with a seven-year maturity at a coupon/interest rate of 12.9% per annum.
This Series II SLB was launched on the September 2, 2024 for a period of three weeks, with a minimum subscription threshold of Rwf 100,000.
The success of the Series II SLB was underpinned by the innovative introduction of an online digital subscription and payment platform which facilitated a 212% increase in the value of subscriptions from individual investors.
The Series II SLB was exceptionally well received by the market and recorded participation from a wide range of investors including domestic pension funds, local banks, insurance companies, unit trusts, asset managers and non-financial institutional investors. The bond also attracted Rwandan diaspora investors from different countries such as Kenya, Canada, UK, Tunisia, Uganda, Norway, Japan, Burundi, Djibouti, South Africa, France, Germany and Ivory Coast.
Investors were buoyed by the "AAA” National Long Term Issuer Rating with stable outlook recently accorded to BRD by Global Credit Rating Company Limited. The rating represents the highest rating that can be assigned to a sovereign or non-sovereign issuer in the local debt capital markets.
Kampeta Sayinzoga, BRD CEO, expressed the bank's deep appreciation, stating, "we would like to extend our sincere appreciation to the Government of Rwanda for its unwavering support and to all those who participated and supported this special issuance, it encourages us at BRD to keep finding innovative ways to raise financing for our national development agenda".
With the primary market now closed, bond buyers will have the opportunity to access bonds through the Rwanda Stock Exchange when it will be listed on October 7, 2024 through their authorised brokers, allowing those who initially missed the opportunity in the primary market to participate.
The SLB supports BRD’s commitment to mainstreaming Environmental and Social Management System (ESMS) implementation across Rwandan financial institutions, increasing women-led business loans, and financing long-term affordable housing mortgages. The success of this Series II SLB gives BRD the confidence to continue relying on capital markets to raise financing for its growth agenda.
This Series II SLB is also partially secured by the World Bank's lending operation to the Government of Rwanda through the Access to Finance for Economic Recovery and Resilience Project (AFIRR).
Following the approval from the Rwandan Capital Market Authority and successful primary offer, BRD's Series II SLB will be listed and traded on the Rwanda Stock Exchange starting Monday 07th October 2024, marking another significant milestone in the bank's journey towards sustainable development financing.
BK Capital Limited and Rand Merchant Bank Limited (RMB) acted as transaction advisors on the Series II SLB issuance.
About BRD plc:
The Development Bank of Rwanda (BRD) is Rwanda's foremost development finance institution, dedicated to supporting the country’s socio-economic development by providing long-term financing to key sectors of the economy. Established in 1967, BRD has been instrumental in financing projects that drive Rwanda’s growth, particularly in infrastructure, agriculture, affordable housing, green finance, and export sectors. BRD is committed to sustainable development and continues to innovate in providing financial solutions that support Rwanda’s Vision 2050.
For the past 57 years since our establishment, BRD is proud to be a strong pillar of Rwanda’s development journey. Our mandate is to ensure that the private sector plays its role of investing in sectors critical to achieving the National Strategy for Transformation and the Sustainable Development Goals (SDGs) by availing affordable, long-term, and customized development finance.