{{The issuance of the Frw 12.5 billion Treasury bond has been successful with a subscription rate of 140% with the highest ever number of applications recorded since its debut in 2008.}}
The National Bank of Rwanda received 56 bids from different categories of investors with Banks accounting for 52.85%, institutional investors 46.16% and retail investors 1.20%. Local investors took the lion’s share with 94.26% while regional investors accounted for 8.04%.
Governor of National Bank of Rwanda John Rwangombwa hailed performance of retail investors in the Treasury bond. “28 retail investors applied for the bond.
This is impressive considering that it is the first time individual investors participate in government securities. We look forward to more participation,” Governor Rwangombwa said.
BNR employed book-building method to determine the price of the bond. The initial guidance was announced at upper 11s which was later revised to 11.575 -11.625% range. The final price was 11.625% with a coupon rate of 11.475%.
The success of the bond is attributed to the far-reaching awareness campaign across the country as well as the region.
The marketing strategy consisted of split roadshows covering the four provinces while at the regional level a roadshow was organized in Nairobi city.
The Minister of Finance and economic planning Claver Gatete noted that more awareness programs to enlighten the public on the importance of long term savings culture.
“We will continue to embark on teaching, explaining and preparing potential investors ahead of time as government bond has best returns, no risk of any kind,” Minister Gatete said.
He further encouraged more retail investors to invest in long term government securities as there are more to come.
On February 17, the Government of Rwanda announced Frw 12.5 billion (US$18.3 million) Treasury bond with a three year maturity period.
The move was in line with the renewed government commitment to revive the bond market and to promote the culture of long term savings through Securities market.
It plans regular issuances of Government Bonds. Next issuances are scheduled for May, August and November 2014.
Ministry of Finance and Economic Planning in collaboration with the National Bank of Rwanda, Capital Market Authority and Rwanda Stock Exchange will continue to educate potential investors on the importance of long term savings culture.
{Minecofin}
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