6 days ago
IFC raises $17mln in Rwanda's second ‘Umuganda' bond
The International Finance Corporation (IFC) has raised Rwf24 billion ($17 million) through an Umuganda Bond to support the development of Rwanda's capital markets, the second such instrument in more than a decade.
The eight-year amortising bond is expected to help attract more international borrowers to issue bonds in the country.
The money raised through the bond, IFC's first onshore Rwanda franc-denominated bond in 11 years, will go towards a digital infrastructure project in the country to help mitigate risks associated with currency fluctuations that occur when borrowing in US dollars or another international currency.'We are excited to return to Rwanda's domestic capital markets with this bond that will support critical infrastructure and deepen domestic capital markets in the country,' said IFC's director for Eastern Africa Mary Porter Peschka in a statement on July 21.'The bond offers investors exposure to IFC's triple-A rating, while also enabling IFC to provide local currency financing to an important project that will enhance digital connectivity.'IFC issued its inaugural Rwandan franc-denominated onshore bond in 2014, when the term 'Umuganda' for domestic Rwanda franc issuances by non-resident entities was coined, marking the first placement by a non-resident issuer in Rwanda's domestic capital markets.
The latest bond, listed on the Rwanda Stock Exchange, attracted diverse investors, including pension funds, insurance companies, banks and asset managers.
It was 1.75 times oversubscribed and carries a coupon of 10.5 percent, about. 0.55 percent below the interpolated government yield.
BK Capital and Rand Merchant Bank are the co-lead managers.'IFC's second Umuganda bond will support our work to deepen domestic capital markets in Rwanda,' said Yusuf Murangwa, Rwanda's Minister of Finance and Economic Planning
IFC has been supporting capital market reforms through programmes such as the Rwanda Capital Market Development project, a joint IFC-World Bank engagement that provides advice on increasing secondary market liquidity in the government bond market, increasing the supply and issuance of non-government bonds, and developing a more diversified, professional investor base.
This is aimed at increasing access to long-term local currency finance for key sectors in Rwanda.
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