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Rwanda Rolls Out Another Rwf10Billion Treasury Bond

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Rwanda Rolls Out Another Rwf10Billion Treasury Bond

In February, the government of Rwanda announced it was issuing two treasury bonds this year but one would later roll out in May.

The Central bank (BNR) has thus announced that it has bounced back with a very interesting bond which will be available for subscription until closing date on May 23rd.

“Following its quarterly calendar, the Government of Rwanda is back to the Market with a 10-year Treasury Bond worth Rwf10 billion. Read the full prospectus with details,” the Central Bank said in a tweet on Monday.

According to the statement seen by Taarifa, ” the Central Bank of Rwanda on behalf of the government of Rwanda invites bids for the 10-years fixed coupon Treasury bond.”

The government urgently needs this money for infrastructure projects and Capital Market development.

Financial experts argue that the government of Rwanda plans to use all this money from the bond shares in implementing infrastructure projects which will spur the country’s development in the seven-year- development agenda.

Figures from the Country’s Stock Exchange market indicate that the market is worth U$3.3 billion(representing 40% of Rwanda GDP).

Basing on a similar Rwf10billion treasury bond issued in 2017, it attracted subscription above the ceiling at 140%.

This 10-year bond is anticipated to attract a lot of investors since the country has recently implemented several doing business reforms that are key in increasing investor confidence.

Rwanda has since 2008 rolled-out 23 treasury bonds which have gone up for grabs. Most of these bonds previously issued had a life span of between two to seven years.

The country is also pushing so hard to have mid sized companies and Small Medium enterprises to list on the Stock market.

The terms and conditions for subscription to this 10-years treasury bond include;

  • Price will be quoted by competitive bidders using the yield to three decimal places; to be listed on Rwanda stock Exchange (RSE), secondary trading in multiples of Frw100000 will commence on May 29th on the Rwanda Stock Exchange.
  • The Central Bank will discount the bonds as a last resort at 3% below the prevailing market yield or coupon rate whichever is higher, upon written confirmation that there is no buyer from the RSE.
  • Interest will be subjected to withholding tax at a rate of 5% for East African Community resident tax payers and 15% for non EAC residents.
  • Residents and non-resident who have opened a CSD account through licensed commercial banks and Capital Market Intermediaries
  • All Investors are required to complete bond application forms available from central Bank website

 

 

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