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

  • Body of woman killed in Bangkok returns

    The Cambodian embassy in Thailand is working to repatriate the body of a casino dealer who was shot dead in Bangkok on Monday night. Ministry of Foreign Affairs and International Cooperation spokesman Kuy Kuong told The Post on Wednesday that officials are preparing paperwork to

  • Chikungunya hits 15 provinces, says gov’t

    Ministry of Health spokeswoman Or Vandine said on Thursday that the chikungunya outbreak in the Kingdom has spread to 15 provinces. Some 1,700 people are now suspected to have the disease. Vandine urged people to prevent its further spread by eliminating shelters for the Aedes aegypti mosquitoes

  • Gov’t exempts visa A and B holders from Covid fees

    Airline passengers who are diplomats and officials of international organisations holding Type A and B visas for travel to Cambodia are exempted from paying Covid-19 testing fees, said the Ministry of Health in its latest adjustment of rules on Wednesday. Health Minister Mam Bun Heng

  • Bill covering dress code draws ire

    Ministry of Interior secretary of state Ouk Kim Lek responded on Tuesday to criticism concerning a draft law that would ban women from wearing overly revealing clothing, saying that input from all parties will be considered as the law moves through the promulgation process. Several

  • Passing the test: Is Cambodia’s education system failing its people?

    The Kingdom’s education system needs to grow its people but some flaws might stifle​ this growth Coming from the Khmer Rouge occupation, with the loss of many scholars and academicians and a collapsed government, the education system had to be reconstructed from scratch – one

  • What’s the deal with Cambodia and China’s FTA?

    Cambodia’s Free Trade Agreement (FTA) with China kicks off a series of FTAs in future but for now, critics wonder what else the parties could bring to the table apart from what it already has to date By the end of this year, Cambodia