IFC Issues $5m Offshore Bond in Rwandan Franc

President Paul Kagame and Jingdong Hua International Finance Corporation Vice President and Treasurer

The International Finance Corporation has issued a 3.5 billion Rwandan Franc (US$5m) bond on the Luxembourg Stock Exchange, KTPress has learnt.

The bond, not yet, unnamed, mark the first Rwandan bonds placed offshore.

The 3-year bond with a 9% coupon, is jointly arranged by Citibank N.A. and Standard Bank of South Africa.

They were placed with five international investors, who had not yet been announced by press time.

The offshore bond follows the decision by Euroclear, within 24 hours ago, to add Rwandan francs as a new denomination currency to facilitate the development of Rwanda Capital Market and attract more international investors.

Euroclear, a Belgium firm, settles domestic and international securities transactions, covering bonds, equities, derivatives and investment funds in more than 90 countries.

Now, over 2000 institutions worldwide can trade the Rwandan Franc denominated securities.

“It adds that value of recognition internationally and therefore it makes it easy for us to trade bonds in Rwandan Franc in the future,” central bank Governor John Rwangombwa, said.

Jingdong Hua, International Finance Corporation Vice President and Treasurer, announced the bond at the just concluded East African Capital Markets Conference held in Rwanda’s capital, Kigali organised by the government together with IFC.

He said this offshore bond will attract more foreign investment into Rwanda, and help mobilize more capital from international investors.

Jingdong Hua said this is a pilot project, and will hold the funds as part of the IFC’s global currency holdings.

Last year, IFC issued a US$22m bond on the RSE, which was over subscribed by 400%.

Finance Minister, Claver Gatete, said IFC is playing a leading role in continuously providing groundbreaking transactions for developing countries and by bringing new products and new investors to our playing fields.

“This bond issue demonstrates the powerful role that capital markets can play in linking international savings to investment needed for development,” Gatete said.

International investors are eager to participate in the African growth story, and Rwanda is emerging as a leader in tapping the interest of these investors, he added.

Rwanda is regarded a risk-free economy with minimal inflationary risks and an economic growth rate averaging 8% over the past decade.

SOURCE: KTPress