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Rwanda’s New Bond Oversubscribed At 178.14%

Rwanda’s seven-year bond worth Rwf10 billion issued on Monday November 20 was oversubscribed at a tune of 178.14% from 66 applications received from different categories of investors.

The Central Bank opened the bond book and closed on Wednesday November 22, 2017. The book-building method was used to price the bond and the final price was announced with a yield of 14.40%.
In the final allotment, individuals and retailors were allotted 10.1%, institutional investors 64.4% while banks were allotted 25.5% of the total amount of bond issued.

The bond coupon will be paid semi-annually and will be listed on Rwanda Stock Exchange on Tuesday November 28, 2017.
The successful issuance of this bond is attributed, as the Governor of BNR, John Rwangombwa noted, to awareness campaigns done across the country in order to educate Rwandans the benefits of investing and saving through government risk free debt securities.

Another one will be issued on February 21, 2018, which will be for a 5-year bond.

According to the Central Bank treasury, bonds are issued with a minimum denomination of Rwf100, 000. These bonds are initially sold through auction in which the competitive bidder sets up the price.

A competitive bid states the rate that the bidder is willing to accept and it’s accepted depending on how it compares to the set rate of the bond.
A non-competitive bid ensures that the bidder will get the bond but he or she will have to accept the set rate. After the auction, the bonds can be sold in the secondary market.

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