In the old days, maybe 6 or 7 years ago, there was a reason high-yield bonds had a high-yield... because they were 'risky'. Now, thanks to the transformative efforts of the world's central banks, there is no risk anymore and Rwanda has figured that out. As AllAfrica reports [4], Rwandan sovereign wealth fund money is being invested in high-yield instruments so that it can grow and be used to fund the country's development projects. "This way, the Fund will grow faster and will be used to support development projects sooner," says the fund's CEO. What could possibly go wrong?
As AllAfrica reports [4],
The Agaciro Development Fund money is being invested in high-yield instruments so that it can grow and be used to fund the country's development projects, Vianney Kagabo, the Fund's chief executive officer, has said.
Kagabo said Rwf23.78 billion ($35 million) has so far been collected...
The initiative, which was launched in August 2012, is Rwanda's first sovereign fund based on voluntary donations by Rwandans, well-wishers and corporate companies.
It is aimed at making Rwanda self-reliant as far as funding development initiatives is concerned.
He noted that these investments earn the Fund an average interest of between 8 and 12 per cent annually, respectively.
Kagabo, however, said the money is still too little to be spent on developments in the near future.
"We will start using the money to finance development projects when the Fund has grown substantially ... right now it's still very small," he noted.
...
"This way, the Fund will grow faster and will be used to support development projects sooner," Kagabo.
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This is what happens when risk is suppressed... What could possibly go wrong?
We suspect Blackrock is jubilant to find another willing buyer of its illiquid HY debt portfolio (though the numbers are tiny)
