The first bond issued by a Maldivian private company has been oversubscribed within two months, according to First National Finance Corporation, the company's lead agent.
Bonds are financial instruments used by public and private corporations to raise capital. It is repaid with interest in the long run. Unlike bank loans, bonds can raise funds from more than one investor.
First National oversaw bond structuring, due diligence, creating the company’s prospectus as well as listing the bond for sale. The agency also handled seeking potential investors by marketing the bond.
Euro Marketing earlier announced issuing of bonds worth MVR 25 million, to be repaid over a four-year period at a 7.5 percent interest rate, which is comparatively lower than most commercial bank loans. The average interest rate on commercial bank loans in the Maldives typically range between 10 to 15 percent.
Euro Marketing announced the sale of the bond on December 29, 2022, through the Viyana Portal, the online platform for trading in the private securities market.
According to First National, the sale of Euro Marketing's bond two months after its issuance demonstrated the scope for private firms to raise funds in the Maldives capital market.
First National has stated that the bond sale by Euro Marketing received positive feedback from retail investors while also providing the opportunity for the largest institutional investors in the country to invest in private companies.
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