Amid This... Consecutive Successes in Corporate Bond Issuance in Cambodia

Following Phnom Penh Commercial Bank and RMA Cambodia,

Microfinancing Prasac Also Successful

High Stability and Interest Rates with Low Currency Risk

▲Ha Jong-won, Vice Chairman of the Cambodia Securities Exchange

[Asia Economy Phnom Penh, Guest Reporter Ang Gilhyun] Recently, a corporate bond worth 61.8 million USD (approximately 75.45 billion KRW) was issued in Cambodia, attracting attention. In a situation where even high-quality companies have difficulty raising funds after the COVID-19 pandemic, Cambodian companies are consecutively raising capital through corporate bond issuance.

According to local Cambodian media on the 12th, the large microfinance company Prasac succeeded in issuing corporate bonds worth 31.8 million USD, the largest amount in the history of the Cambodian bond market. This is the third issuance this year following Phnom Penh Commercial Bank (PPCB, 10 million USD) and RMA Cambodia (20 million USD) on the 21st and 30th of last month, respectively. Notably, Prasac’s corporate bonds were fully guaranteed for the first time by the Cambodia Credit Guarantee and Investment Facility (CGIF), adding significance. CGIF is a trust fund established in November 2010 by ASEAN, Korea, China, Japan, and the Asian Development Bank (ADB) to expand the regional bond market by guaranteeing bonds of Asian companies.

In Cambodia, to issue corporate bonds, a minimum capital of 500,000 USD and a minimum issuance size of 250,000 USD are required. However, Cambodian corporate bonds are noted for their high stability and relatively high interest rates ranging from 6% to 8.5%. Unlike other Southeast Asian countries, Cambodia also has very low currency risk. Cambodia uses its own currency, the Riel, but recognizes the US dollar as legal tender. The Riel exchange rate fluctuation is evaluated as stable within ±2.5%.

Acleda Bank, Cambodia’s largest commercial bank, is also expected to be listed by the end of this month. If Acleda Bank is listed, it will become the first commercial bank to be listed on the Cambodia Stock Exchange. Currently, the Cambodia Stock Exchange includes three public enterprises (Sihanoukville Autonomous Port, Phnom Penh Autonomous Port, Phnom Penh Water Supply Authority) and two private companies (Phnom Penh Special Economic Zone, garment manufacturer GTI).

Ha Jongwon, Deputy Director of the Cambodia Securities Exchange, said, "We expect 3 to 4 more companies to issue corporate bonds within this year," adding, "It is also positive that bond market participants are diversifying, with multinational insurance company Prudential Life participating in bond underwriting besides banks."

This content was produced with the assistance of AI translation services.