Issuance reflects the scramble for African sovereign bonds and country’s growing economic allure.
Rwanda central bank governor John Rwangombwa, in an interview with Euromoney Country Risk, explains why the sovereign shunned index buyers, and sheds light on economic reform efforts.
Why did you decide not to issue a benchmark $500 million bond?
“We came to the market for one specific reason: to refinance infrastructure projects, so we didn’t come to the market for the sake of borrowing for the budget deficit.
“We wanted really to finance various economic and structural projects, and the cost of these projects added up to $400 million.
“And when we reviewed the pricing, we thought the possible additional deficit point for not hitting the $500 million mark would be cheaper than taking just $100 million, which we didn’t have a specific project finance. So it was very much a decision borne out of financing specific projects.”
How will this bond issue affect the country’s debt sustainability position?
“Out of the $400 million we are borrowing, it is only $200 million which is new debt and the other $200 million is financing. In terms of debt numbers, government debt is 24% of GDP.
|Rwanda central bank governor John Rwangombwa|