Fiji raises $13 Million on First-Ever Bond reopening Facility

The Fijian Government has raised $13 million in a reopening of a ten-year bond, the first Bond Reopening Facility in the country’s history.

Amid strong investor optimism, $15 million was received in tenders after the Fijian Government floated $10 million in reopened bonds. Of the $15 million received, $13 million was accepted with a coupon rate of 6.00 per cent per annum.

The Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum, welcomed the high demand for the reopened bonds as major vote of confidence in the management of the Fijian economy. He also pointed to the reopening as a critical first step to developing market liquidity in Fiji, which grants investors better pricing, reduced transaction costs and greater flexibility to make adjustments to their investment portfolios.

“The Fijian Government currently has a bond portfolio that is held in small sized lots – which essentially means it is limited to a small number of investors. By reopening these bonds at set benchmarks of maturity, we can create larger stocks of bonds. Larger stocks of bonds attract a greater number of investors, giving more investors a stake in the Fijian economy. Different types of investors have different incentives and interests, and that ultimately boosts and diversifies flows of trade into our economy and increases market liquidity,” he said.

The Attorney-General also noted that investors are more willing to pay premiums for more liquid markets and that would lead to lower borrowing costs for Government and lower burdens on Fijian taxpayers.