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Rwanda to issue 10-year treasury bond worth 14.5 mln USD

Xinhua, May 13, 2015 Adjust font size:

Rwanda will issue a 10-year bond worth 14.5 million U.S. dollars, or about 10 billion Rwandan francs (Rwf), this month to finance infrastructure projects, the National Bank of Rwanda (BNR) said Tuesday.

The bond will have a market-determined fixed coupon rate, and the bids would be received between May 25 and 27, the BNR said in a statement.

The country's central bank did not specify which infrastructure projects would be funded by the bond's proceeds, saying the bond aimed at raising money for ongoing infrastructure projects as well as boosting the country's capital market which is at infancy stage.

The global results of the issued bond will be published and successful bidders will get their results through email from May 27, the BNR said.

The bond follows the success of a three-year bond worth 18.3 million dollars (Rwf 12.5 billion) issued in February, a seven-year bond of 21 million dollars (Rwf 15 billion) issued in November and a five-year bond of 21 million dollars (Rwf 15 billion) issued in August last year.

These bonds, which are under the government's quarterly issuance program, are all intended to facilitate the development of the country's capital in order to fund infrastructure projects.

"We have seen government bonds oversubscribed more than twice, and we expect this one to be oversubscribed," Celestin Rwabukumba, CEO for Rwanda Stock Exchange (RSE), told reporters Tuesday.

The first and second bonds were oversubscribed by 140 and 232 percent respectively, indicating investor confidence in the outlook for Rwanda's currency and economy. The small central African nation has been recognized as one of the fastest growing economies in the world.

No coupon rate has been announced yet, but brokerage firms suspect the bond could be overpriced.

BNR Governor John Rwangombwa said the interest on the new bond will be subject to withholding tax at 5 percent to East African Community (EAC) residents and 15 percent to non-EAC members.

Kenya's Equity Bank recently listed over 3.6 billion shares on RSE, capitalizing the market from 2.1 to 4.2 billion dollars.

Other banks listed at the RSE are the Bank of Kigali and KCB Rwanda, a subsidiary of another Kenyan financial giant, Kenya Commercial Bank Group. Endi