IFC Begins Marketing Rwanda Bond as Africa Debt Plan Expands

The International Finance Corp. is offering local-currency bonds in Rwanda, which is marking 20 years since a genocide that killed at least 800,000 people, as it expands an African debt program.

The notes will be sold in Rwandan francs and listed on the nation’s bourse, Standard Bank Group Ltd., which is arranging the sale with CfC Stanbic Bank and Bank of Kigali Ltd., said in an e-mailed statement today.

“We would hope to issue in the coming month or so,” depending on market conditions, Alexandra Klopfer, a spokeswoman for the IFC in Washington, said in an e-mailed response to questions. “The size of the bonds will depend on IFC’s funding needs.”

The World Bank unit debuted its Pan-Africa Domestic Medium-Term Note Programme with the sale of 150 million Zambian kwacha ($24 million) of Zambezi notes in September last year in an offer that was 4.8 times oversubscribed. Africa may become the IFC’s biggest portfolio by 2016, Chief Risk Officer Saadia Khairi said in an interview in Frankfurt in November. The lender has been in talks with the governments of Botswana, Kenya, Namibia, South Africa, Nigeria, Ghana and Uganda about local-currency issuances.

The market regulator in the central African nation approved the IFC securities, which may be issued in May, Rwanda Stock Exchange Chief Executive Officer Pierre Celestin Rwabukumba said today in a phone interview from the capital, Kigali. The bond will be the fourth traded on the bourse, he said.

More Diversification

“The listing of the bond will increase the number of transactions on RSE, which translates into increased liquidity and diversification,” Rwabukumba said.

In February, Rwanda received record demand at the first sale of debt in francs since 2011 and the country said it would offer more securities in May, August and November. Rwanda is the only East African nation to have issued a Eurobond, raising $400 million in 2013. The yield on the May 2023 bond has fallen 74 basis this year to 6.74 percent. The country’s debt has returned 7.4 percent in 2014, the second-best best in Africa, according to Bank of America Merrill Lynch indexes.

IFC issues local-currency bonds to support domestic capital markets and increase access to finance for private companies, Klopfer said. Proceeds from the notes will be used for investments in the country, she said.

“Under the IFC Pan-African Domestic Medium-Term Note Programme, we are currently working with 11 countries in Africa,” Klopfer said.

The lender in February last year raised 12 billion naira ($74 million) in Nigeria selling its Naija bonds. Since then, it has received approval to set up a program that will allow the IFC to issue as much as $1 billion of debt in Africa’s biggest economy. The IFC has also set up a domestic medium term note program in Ghana.

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