Public subscription period for RMA (Cambodia) Co Ltd’s and Prasac Microfinance Institution Ltd’s corporate bond issues start from Monday as the firms plan to list on the Cambodia Securities Exchange (CSX) later this month.
RMA’s subscription will be held to Wednesday and Prasac’s to April 22, following approval from the Securities Exchange Commission of Cambodia (SECC) on March 31, the underwriter SBI Royal Securities Plc said in an announcement.
RMA will issue 800,000 shares with a coupon rate of 5.5 per cent per annum with five-year maturity annual payment. The minimum amount of investment is $5 million with $1 million increments.
Prasac will issue 1,272,000 shares with a coupon rate of 7.5 per cent per annum with three-year maturity semi-annual payment. The minimum amount of investment is 800 million riel ($197,000) with 400 million riel increments.
Both have a $25 offering price per share and are offered only to qualified investors.
SBI Royal Securities managing director Seng Chan Thoeun told The Post on Sunday that both bonds are fully guaranteed by the Credit Guarantee and Investment Facility (CGIF), an Asian Development Bank trust fund.
The CGIF guarantee offers several benefits that will be shared by all stakeholders.
Chan Thoeun said: “They are the first bonds guaranteed by the CGIF. The two bonds are also registered under the AMBIF (ASEAN+3 Multi-Currency Bond Issuance Framework) programme. This will increase the profiles of Cambodia’s capital market and of its dynamic local companies.
“The two bonds will further familiarise foreign investors with Cambodia’s capital market due to CGIF’s strong capital position and high credit rating. The CGIF is rated AA by S&P Global with a ‘stable’ outlook,” he said.
CSX vice-chairman Ha Jong-weon said it gave approval in principle on listing eligibility to RMA and Prasac on March 30 and February 24, respectively.
“After that, they will report their subscription results to the SECC and then will file an official listing application to the CSX.
“After their bonds list on the CSX, investors will have further diversification of low risk investments, as the bonds are 100 per cent guaranteed by the CGIF. We hope the bonds will bring more investors and higher liquidity for the market,” he said.
Chan Thoeun noted that the CGIF’s high credit rating applies to its guaranteed bonds and allows the issuers to offer a lower coupon rate than would be possible without it.
“This means that issuers can finance their operations with lower costs, allowing for increased profitability,” he said.
Last year, market capitalisation at the CSX increased by 157 per cent to $800.39 million.
By the end of the year, the CSX had attracted 22,446 investors, raising nearly $151 million for all companies on the Main Board and the three companies that have issued corporate bonds, said an SECC report issued in February.
On average, 1.7 million shares – worth about $4.2 million – are traded each month, SECC data shows.