Rwanda, faced with a cut in international aid for the past several months, on Thursday became the first country in east Africa to turn to international markets to raise funds by launching a $400 million 10-year bond.
Investors, attracted by the country's buoyant economic growth, bid more than $3 billion, which was issued with a yield of 6.875%, market sources said.
"It was preceded by an expensive roadshow in Hong Kong, Singapore, London, Munich, Frankfurt, Boston, where it was very well received," said Nick Darrant, emerging market manager at BNP Paribas, which handled the issue along with Citigroup.
The issue will enable Rwanda to repay government loans, complete a conference centre in the capital and finance a hydro-electric power project.
"It wasn't as oversubscribed as Zambia in September last year, but still shows a healthy appetite for Sub-Saharan African sovereign debt," said Mark Bohlund, an economist who follows Sub-Saharan Africa at IHS Global Insight.
"It should therefore indicate strong demand for other Sub-Saharan African sovereigns issuing debt, both Angola, Ghana and Nigeria (which have issued debt before) and debutants like Kenya and Tanzania," he told AFP.
Turning to global financial markets will allow Rwanda, whose population is largely rural and who last year posted per capita income of just $664, to diversify its sources of funding and to "narrow the funding gap for its infrastructure investments", Bohlund said.
Rwanda, whose infrastructure, economy and social fabric were destroyed less than two decades ago by the genocide of 1994, posted 8% economic growth last year, despite cuts in international aid, and could post 7.5% growth this year, according to a forecast by the International Monetary Fund.