Rwanda’s $620mn In Second Eurobond And Increased Investor Appetite

Published 2 years ago
(Photo by -/AFP via Getty Images)

The East African nation has raised the money to strengthen economic recovery

The Government of Rwanda has raised $620 million through the issuance of the latest 10-year Eurobond bond issuance, the second Eurobond after 2013 when the government last went to the market.

The Ministry of Finance and Economic Planning announced on August 2 that Rwanda’s second international bond was oversubscribed nearly three times as it attracted some $1.6 billion in orders.


The sale, handled by Deutsche Bank and Citigroup, priced the new debt at a 5.5% yield.

“We are pleased with the positive response from investors in this 2021 Eurobond issuance,” John Rwangombwa, Governor of the National Bank of Rwanda, said in a statement.

“The lower yield of this issue will result in a reduction in our annual interest payments over the next 10 years, strongly contributing to our debt sustainability strategy,” the Governor noted.

Just over half of the proceeds go to refinance the majority of the country’s other outstanding mortgage, which raised $400 million in 2013 and would expire in 2023.


The rest, the Finance Ministry said, will be spent on “key priority projects” to strengthen Rwanda’s economic recovery. With a slightly higher issue, it puts Rwanda in the main emerging market bond index which means that investors will be looking for such issue.

“This was a very attractive time for Rwanda to come to the market. This is indicative of the much lower coupon that Rwanda sold its bond at – more than 1 percent lower than what they borrowed in 2013,” Kevin Daly, a fund manager at Aberdeen Standard Investments, told CNBC Africa.

Global ratings agency Fitch gave the latest bond a B-plus rating last week and downgraded Rwanda’s outlook to negative. The ratings agency said a failure to stabilize the debt at the current level of about 70% of gross domestic product could lead to a downgrade in the future.

However, the International Monetary Fund (IMF) sees Rwanda as a low-risk debt country in contrast to Kenya and Ghana – countries that have been to the Eurobond market recently.


“The success of the new issue is a validation that investors at this stage are not overly concerned about the medium-term outlook for Rwanda,” Daly weighed in.

Rwanda is the latest among African countries that have issued international bonds since the start of this year, including Kenya that raised $1 billion by issuing a 12-year Eurobond at 6.3% on June 17.

Countries like Benin, Cameroon, and Senegal have been to the market this year, and on average, African bond issuances have been oversubscribed three times, reflecting increased investor appetite.

By Julius Bizimungu