Suva, Fiji, November 24, 2022 – The first offering of a wholesale corporate bond under a new regulatory framework in Fiji has marked a major step forward in efforts to diversify the nation's financial market by providing a new source of financing, with the potential to support business growth while generating gains for the broader economy and the people of Fiji.
Fijian Holdings Limited (FHL) last week opened a Wholesale Corporate Bond offer targeting a capital raising of FJD$30 million (US$13.6m), the first bond offer by any company under the Companies (Wholesale Corporate Bonds) Regulations 2021. This offer is seen as underscoring the importance of enabling regulations and policies that were developed by the Reserve Bank of Fiji (RBF) and South Pacific Stock Exchange (SPX) with support from the International Finance Corporation (IFC).
"This is the first offer to be made under the Companies (Wholesale Corporate Bonds) Regulations 2021, and is an indication of the potential of the capital markets to provide an alternative source of funding for Fijian businesses," said Reserve Bank of Fiji Governor Ariff Ali. "It also provides a much-anticipated investment opportunity in an environment of low interest rates."
Once issued, the bonds will also be listed for trading on the SPX Over-The-Counter market.
"The SPX is delighted to witness the opening of the offer period by FHL and looks forward to working closely with FHL to ensure this offer translates into a successful listing on the SPX," said SPX Acting Chief Executive Officer Pretesh Prasad. "This anticipated listing of the Wholesale Corporate Bond will be the first-ever for the SPX and is in line with our strategic goal to offer investors a diverse range of products and an alternative means for businesses to raise capital through our stock market."
With the introduction of the Companies (Wholesale Corporate Bonds) Regulations 2021 investors in Fiji can now access an additional mechanism and make more informed decisions about how to price the debt of different companies. For the issuers of bonds, the new regulatory framework can provide another option to access capital, protecting against periods of financial stress.
"We see the launch of the first bond under the new regulations as an important step in the deepening of Fiji's financial market," said Judith Green, IFC Country Manager for Australia, New Zealand, Papua New Guinea and the Pacific Islands. "While an active corporate bond market opens up a range of benefits for issuers and investors, it can also provide tangible gains for the whole economy, including the potential for funds raised to generate economic activity and jobs."
This reform was possible through close collaboration between IFC, RBF and SPX, as well as the support from the governments of Australia and New Zealand, and our shared interest in supporting economic development in Fiji.
Fiji Partnership
IFC's work in Fiji is supported by the governments of Australia and New Zealand under the Fiji Partnership to unlock private sector investment, promote sustainable economic growth, and boost shared prosperity in Fiji.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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