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COLOMBO (Reuters) - Strong economic growth in the Maldives is expected to help lower the nation's borrowing costs in future, the government said on Tuesday, after the Indian Ocean archipelago raised $200 million via a debut sovereign bond last week.
The government issued the 5-year bond with a coupon of 7 percent, with Hong Kong-based BoCom International Holdings Co Ltd acting as the sole global coordinator for the offering.
"The government thinks this is a fair coupon rate for international investors whilst remaining affordable for the Maldives. It is in fact a robust rate if we look at similar recent offerings," a government spokesperson said in a statement emailed to Reuters.
The comments come after the main opposition party described the coupon rate on the debut offering as high and that it could force up debt costs for private-sector borrowers.
Responding, the government disputed that view.
"Inaugural offerings command a premium – given they are an untested proposition on the international market. The Maldivian economy continues to grow stronger quarter on quarter. Given this, there is no reason why the Maldives' coupon rate will not go down on our next issuance."
The Maldives' economy is expected to grow 4.7 percent this year, faster than an estimated 3.9 percent last year, according to official forecasts.
The government said the "successful debut in the international bond market will open the door for public and private companies in the Maldives to tap into international markets" and diversify financing options for its corporates.
"The bond will open up innovative financing options for resort developers, especially newer local companies to reach investors," it added.
Though the Maldives has been mired in political unrest for years, the bond was twice oversubscribed last week.
Asian investors bought 83 percent of the offering, with the rest bought by Europeans, official data showed.
Reporting by Shihar Aneez; Editing by Jacqueline Wong