1. What is a Viti Bond?
A Viti Bond is an alternative option to other investments such as term deposits, shares or units in a trust fund. It is a type of fixed income instrument/paper tailored for retail or small investors. The Viti Bond is issued by the Government of Fiji. A total of $10 million has been allocated for the issue of Viti Bonds for 2014.
2. What is a Bond?
A bond is a type of investment where the investor (bond holder) lends money to the borrower (the issuer).
An issuer sells bonds to raise funds and agrees to pay the bond holder an agreed interest rate at fixed intervals throughout the life of the bond. Interest payments for the bond are referred to as coupons. Bond terms normally range from 2 years to 30 years. At the end of the term, the issuer pays the full amount invested back to the bondholder. In addition, the issuer appoints an agent or a registrar of bonds to handle the issuing of bonds on their behalf.
In the case of the Viti Bond, the investor is the general public and the issuer is the Government of Fiji. The appointed registrar of Viti Bonds is the Reserve Bank of Fiji.
3. What are the Terms and Interest Rates on the Viti Bonds?