The recent success of the RB Patel Group (SPX:RBG) corporate bond debut on the South Pacific Stock Exchange (SPX) and the increased participation of the investing community in its uptake has sent a positive signal to the broader market that there is an appetite among investors for new and well-structured investment opportunities in the capital markets.
This is the view of SPX chairman Nitin Gandhi following the oversubscription of RBG’s secured wholesale corporate bond offer, which closed last week raising $21.25million for the supermarket chain.
“The strong response to this bond offer demonstrates that there is clear appetite among investors for new and well-structured investment opportunities within our capital market,” Mr Gandhi said.
“Importantly, the level of demand from eligible investors highlights the depth of capital that exists within the system and its readiness to support credible issuers seeking long term funding.”
In a statement, SPX said demand was recorded across all three tranches of the offer, spanning three year, five year and seven year tenors. “The bond offer attracted participation from 25 eligible investors across both institutional and individual segments, reflecting growing engagement with corporate debt instruments and their role in portfolio diversification.
“This follows the first corporate bond issuance, which attracted eight investors, and indicates a widening level of participation in fixed income offerings as the corporate bond market continues to evolve,” SPX stated. Mr Gandhi said the transaction should encourage more companies to consider capital raising through market-based instruments.
“As more issuers come forward, we expect the corporate bond market to play an increasingly important role in supporting business growth, capital formation, and overall market development in Fiji,” he said.
SPX stated it will continue to work with issuers and investment advisors to support the orderly development of the corporate bond market as a complement to equity capital raising. RBG’s offer, which opened in early October and closed last week, required a minimum investment of $200,000, with capital raised intended mainly to finance RBG’s pipeline of projects in Labasa, Nadawa, Nasinu and Ba, and to repay a portion of existing drawn bank debt, according to its offer announcement.
Subscription by tenor were as follows:
- Three-year bonds: $10.450million,
- Five-year bonds: $7.450m,
- Seven-year bonds: $3.350m.
RB Patel is the second SPX-listed company to list its debt on the market via a secured corporate bond issuance, following in the footsteps of its parent company Fijian Holdings Ltd, who pioneered it with its $30m offer in 2022.
