Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom’s first corporate bonds in sight after approval from NBC

Kingdom’s first corporate bonds in sight after approval from NBC

Content image - Phnom Penh Post
A branch of Hattha Kaksekar Limited on Phnom Penh’s Street 271. Pha Lina

Kingdom’s first corporate bonds in sight after approval from NBC

Hattha Kaksekar Limited (HKL) is set to become the first company to issue corporate bonds in the Kingdom, and it is doing so to the tune of 80 billion riel ($20 million).

The firm has received approval from the National Bank of Cambodia (NBC) for the move.

HKL announced on Friday that the Cambodian microfinance firm plans to initially offer $20 million in bonds, and increase this by another $10 million if there is high demand.

The bonds will reach maturity in three years with a coupon rate from 7.5 to 8.5 per cent per year.

President and CEO of HKL, Hout Ieng Tong, said: “HKL is going to use the net proceeds [from the bonds] for funding growth of our lending business, working capital and general corporate purposes.

“The proceeds from HKL’s Khmer riel bond issuance will also support local micro-, small- and medium-sized enterprises,” he said.

After obtaining the NBC’s green light, HKL will submit documents to the Securities and Exchange Commission of Cambodia (SECC) for approval. Its approval forms for listing on the Cambodia Securities Exchange (CSX) are currently pending.

SBI Royal Securities is a financial adviser and underwriter for HKL’s bonds issuance project. The tentative subscription period for the bonds will be from September 26 to October 1.

In a statement in May, the International Finance Corporation (IFC), a World Bank Group subsidiary focusing on private-sector investment in developing countries, disclosed a proposal to invest up to $20 million in riel bonds issued by HKL.

In the statement, the IFC said it would leverage its global experience in local bond issuances to help HKL issue the first corporate bonds in the country.

Seng Chan Thoeun, managing director at SBI, told The Post that the bonds will give local investors more options, as up to now only stocks have been available on the CSX.

“Bonds can provide a stable source of low-cost funding. This is a very important step in furthering the development of the Cambodian capital market,” he said, adding that economic benefits will begin to stack up as more companies begin the process of issuing bonds.

HKL is the third largest microfinance deposit-taking institution (MDI) in the country in terms of assets, loan portfolio and net profit. It was ranked second in the Kingdom in terms of customer deposits as of the end of last year.

The company’s gross loan portfolio and customer deposits stood at $576.8 million and $367.4 million, respectively, as of December 31 last year.

At that time, their total assets stood at $69 million and net profit was up to $15.3 million.

MOST VIEWED

  • WHO: Covid in Cambodia goes into new phase

    The World Health Organisation (WHO) in Cambodia said that Cambodia has reached a new phase of the pandemic with “decreasing case numbers, high vaccination coverage and a more transmissible circulating variant threatening a hidden surge”. In a press release on September 6, the WHO said that

  • Purging Sihanoukville’s past with a new masterplan

    Amid illicit activities, haphazard development and abandoned projects, the coastal city of Sihanouk province needs a reset to move forward. A new masterplan might be the answer to shake off its seemingly mucky image to become the Shenzhen of the south Gun toting, shootouts, police

  • 'Pursue your goals, reach out to me': Young diplomat tapped as envoy to South Korea

    Chring Botum Rangsay was a secretary of state at the Ministry of Foreign Affairs and International Cooperation before being designated as the new Cambodian ambassador to South Korea. According to her official CV published on the foreign ministry’s website, she started her first government

  • International air visitor arrivals dip 93%

    The number of foreign tourists entering Cambodia through the Kingdom’s three international airports witnessed a sharp 92.5 per cent year-on-year decline in the first seven months of this year, according to the Ministry of Tourism. The airports handled 51,729 international tourists in the January-July period versus

  • School reopening ‘offers model for other sectors’

    World Health Organisation (WHO) representative to Cambodia Li Ailan said school reopening process should be used as a role model for reopening other sectors currently mothballed by the Covid-19 pandemic. Li strongly supports the government’s decision to reopen schools, saying it is a decision

  • Covid jab drive for 6-11 age group to begin Sept 17

    Prime Minister Hun Sen has permitted Covid-19 vaccinations for over 1.8 million children aged 6-11 across the country from September 17 in order for them to return to school after a long hiatus. Hun Sen also hinted that vaccinations for the 3-6 age group will follow in