Advanced Bank of Asia Limited (ABA Bank), a National Bank of Canada Group member, will become the third bond issuer in the Cambodian capital market after it obtained approval from the National Bank of Cambodia (NBC), it announced on Friday.
Insiders have said the move shows that the Cambodian capital market is becoming more attractive to investors.
ABA Bank plans to raise 100 billion riel ($25 million) through its first corporate bonds issued in the Kingdom’s capital market.
The bonds will have a maturity date of three years with an annual coupon rate of seven to 7.75 per cent.
Net proceeds from the bond issuance will be used for operating expenditures as well as growth in the lending business, according to the bank.
“[The money] will support rural micro, small and medium enterprises [MSMEs] including women entrepreneurs in Cambodia,” the bank said.
SBI Royal Securities Plc is the sole financial adviser and underwriter for ABA Bank’s landmark transaction.
Cambodia Securities Exchange (CSX) Market Operations Department director Kim Sophanita said while companies which list on the exchange are provided a 50 per cent, three-year tax exemption on profit by the government, ABA Bank’s entry will boost the attractiveness of the Cambodian stock market.
“ABA’s entering the market will be a huge contribution to the Cambodian securities market. As the CSX’ index had continued to rise since early this year, the public’s awareness of the stock exchange is also increasing,” she said.
Following NBC approval, ABA Bank will submit a Listing Eligibility Review Application to CSX.
Sophanita said ABA Bank would be able to officially issue its first bond in the next two months following the approval.
LOLC (Cambodia) Plc, CSX’ second bond issuer, officially listed on May 10.
LOLC CEO Sok Voeun welcomed ABA Bank’s announcement, saying an increase in listed companies on the stock exchange is a positive sign for the Kingdom’s securities sector.
“In the future, there will be more financial institutions and other companies coming into the market because it can help the companies to raise more funds and expand their operations,” he said.
ABA Bank will become the eighth company listed in CSX and will become the third bond issuer after LOLC and Hattha Kaksekar Limited (HKL).
As of Friday, ABA Bank’s total assets totalled $3.36 billion, making it the third largest bank in Cambodia.