Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia bond a possibility

Cambodia bond a possibility

A man looks at an electronic stock board as a woman walks past at the Asia Plus Securities Pcl headquarters in Bangkok
A man looks at an electronic stock board as a woman walks past at the Asia Plus Securities Pcl headquarters in Bangkok. BLOOMBERG

Cambodia bond a possibility

The launch of an unrated Laotian government bond on Thailand’s bond market could pave the way for Cambodia to issue its own government bond denominated in Thai baht.

The Bangkok Post reported yesterday that Thailand’s Finance Ministry and Public Debt Management Office had allowed Cambodia, Vietnam and Myanmar to follow in the steps of Laos and raise capital through the issue of their own sovereign bonds on Thailand’s financial market.

Grant Knuckey, chief executive officer of ANZ Royal Bank, told the Post yesterday by email that the Thai framework opened up the opportunity for Cambodia to permit small debt issues to a willing high-yield investor community.

“It could possibly serve as a ‘training ground’ for Cambodia to prepare for a larger international US dollar debt issuance in say, one to two years time,” he said.

The Laotian government became the first country in the region to raise capital in Thailand through a bond sale, with the issue of 1.5 billion baht ($50 million), three-year bonds in May last year. The notes were priced at a yield of 4.5 per cent. Two more subsequent installments of 3 billion baht and 4.5 billion baht have since been issued.

Adisorn Singhsacha, managing director of Twin Pine Consulting Co, a financial adviser on the Laos bond sale, told the Bangkok Post that the Laotian government planned more bond issues in the future to raise capital for energy and infrastructure projects.

His company was also working with the Myanmar and Cambodian governments on possible baht denominated bonds, Singhsacha added.

Singhsacha said that the cost of raising funds in Thailand was greater than borrowing from international institutions, but that a bond issue did not come with a lot of the ties applied to foreign lending.

Svay Hay, president and CEO of ACLEDA Securities, said that the offer of unrated bonds, or a bond that has not had its creditworthiness assessed by an international credit rating agency, provides the Cambodian government with another tool to raise capital.

“The government and corporations can mobilise funds from the public investors to support project and growth, and the securities sector will be more active and attract more investors both local and overseas,” Hay said.

“Sufficient sources of funds would fulfill shortages in the budget for expenditure and there will be a change in debt scenarios with [the Cambodian government being] less dependent on partners
or lenders.”

In principle, debt securities are rated to give investors trust in the issuer, but in the instance of an unrated security, investors would rely solely on trusting the country that issues the bond, Hay added.

MOST VIEWED

  • Municipal hall releases map detailing colour coded Covid risks by commune

    Phnom Penh municipal governor Khuong Sreng released an official map detailing the red, yellow and dark yellow zones within the city under the new lockdown orders for Phnom Penh announced on April 26. The designation of red, dark yellow and yellow corresponds to areas with high,

  • Phnom Penh unveils rules for post-lockdown transition

    The Phnom Penh Municipal Administration issued a set of detailed guidelines for the seven days to May 12 after the capital emerges from lockdown at the onset of May 6. In the 14-page document signed by municipal governor Khuong Sreng released on the evening of May 5, the

  • SBI LY HOUR Bank Launches Cross Border Money Transfer Service between Cambodia and Vietnam on RippleNet, utilizing DLT

    SBI LY HOUR Bank Plc and Hanoi-based Tien Phong Commercial Joint Stock Bank (TPBank) on Friday launched the first Cambodia-Vietnam money transfer service in real currency via RippleNet, provided by SBI Ripple Asia Co Ltd to provide safe, fast and convenient services. SBI LY HOUR

  • Gov’t issues guidelines as lockdown nears end

    The government has issued a five-page set of instructions to be enforced when the three-week lockdown of Phnom Penh and adjacent Takmao town in Kandal province ends on May 6. According to an announcement signed by Prime Minister Hun Sen on May 4, the instructions cover a

  • Cambodia ready to exit LDC status

    Cambodia is well-prepared to minimise economic risks when it graduates from its Least Developed Countries status, according to a senior official at the Ministry of Commerce on May 7. Four LDCs – Cambodia, Laos, Bangladesh and Nepal – met at a virtual workshop last week to explore potential

  • Tottenham Hotspur to wear ISF Cambodia logo on jerseys in match against Sheffield United

    Last year, the Indochina Starfish Foundation (ISF) – an NGO providing education to underprivileged children in Cambodia – made global headlines with its “socially distanced” football initiative. This year, a world-class football club – Tottenham Hotspur FC – will wear special edition jerseys to show their support for ISF