Economy

Fiji raises $40million as investors give a thumbs up for the “green” bond

Fiji’s first-ever issue of a “green” bond received an overwhelming interest from commercial banks and other local investors.

Staff Writers

November 1, 2017 3:43 pm

The Minister of Economy, AIyaz Sayed-Khaiyum held a press conference in Suva today and announced the results of the week-long tender which ended on Tuesday.

The Reserve Bank had called for two tenders, worth $20m each, for a 5-year and a 13-year bond.

The A-G said both the tenders were oversubscribed and generated a lot of interest.

“A total of $87.71m were received in tenders for the two tenders of 5-year and 3-year bonds. A total of $60.10m was received for the 5-year bond, and a total of $27.61m was received for the 13-year bond,” said Sayed-Khaiyum.

“We noted that commercial banks that normally do not invest in bonds put in a combined tender amounting to $40m. We thank the commercial banks for their support, as this is the far highest amount the banks have tendered for any domestic bond.”

Other local investors had tendered $47.70m, which included the Fiji National Provident Fund, insurance companies, and the Unit Trust of Fiji.

Since the tender was oversubscribed, $13.27m was allocated to the commercial banks.

The A-G (center) held a press conference in Suva today to announce the results of the tender for Fij's first-ever "green" bond. (Photo by Newswire).
The A-G (centre) held a press conference in Suva today to announce the results of the tender for Fiji’s first-ever “green” bond. (Photo by Newswire).

The A-G said the issue also attracted international interest.

“There was also an overseas investor for the green bond. This is the first time we have had an overseas investor for Fijian denominated bond. The participation rate recorded was three times that’s normally associated with Fiji government infrastructure loans.”

Only $20m of each tender was accepted at a coupon rate of 4% pa for the 5-year maturity, and 6.30% for the 13-year maturity.

There will be more issues from December 2017 to May 2018 to raise the targeted amount of $100m. However, the flotations only will be for the 13-year maturity.

More on this story in our weekly issue on Friday.

What do you think? Leave a comment below.