On 9 September 2022, the Mauritius Sugar Syndicate (“MSS”) completed its second capital raise through the issue of MUR 2.0 billion short term notes under the Bank of Mauritius’s Money Market Issuance Guidelines.
MSS is a non-profit organization whose primary goal is to optimise producers’ revenue through the most appropriate marketing strategies while ensuring that the sale proceeds are fairly distributed. The Mauritius Sugar Syndicate is governed by sugar producers, comprising corporate and smaller independent sugarcane growers as well as millers.
The notes, rated CARE MAU A1+ (stable), attracted strong investor demand from sophisticated investors, which led to the issue being over-subscribed. Given the uncertain interest rate environment, MSS chose to conduct a competitive bid process thereby allowing the market to set the price. This approach coupled with strong investor appetite contributed to a reduction of 45 bps in the MSS’s credit spread compared with the 2021 issuance. MSS was advised by MCB Capital Markets on this transaction.
Devesh Dukhira, Chief Executive Officer of the Mauritius Sugar Syndicate, commented: “We are pleased with the successful completion of this fund raising. It enabled MSS to further expand its sources of financing, which is necessary to provide advance payments to producers. Any reduction in finance costs is reflected in higher net proceeds, hence a higher ex-Syndicate price paid to our members, and I thank our team and MCB Capital Markets for their efforts in achieving this result.”
Rony Lam, Chief Executive Officer of MCB Capital Markets, commented: “We are proud to have advised MSS on this transaction. Despite the rising interest rate environment, MSS was able to raise funds from the market at a lower spread than in 2021, a most remarkable outcome given the relatively more volatile macro-economic environment. This reflects investors’ confidence in the financial strength of MSS.”