MFI to issue first corporate bond

Cambodian microfinance institution (MFI) Hattha Kaksekar Ltd (HKL) yesterday kicked off a roadshow for its first ever corporate bond in the Kingdom.

Geared towards attracting prospective investors, it became the first company to issue corporate bonds in the Kingdom and plans to raise 120 billion riel ($30 million) to fund the growth of its lending business.

The company plans to issue 1.2 million in corporate bonds, worth 100,000 riel per unit.

The bond maturity is three years with a coupon rate from 7.5 to 8.5 per cent per year.

HKL president and CEO, Hout Ieng Tong, said during the event yesterday that the bonds issuance is expected to be successful despite the country’s lack of experience.

“When we started preparing [to issue the bond], many investors contacted HKL to invest in our bonds,” he said.

The issuance of HKL’s corporate bonds marks the creation of the local debt capital market.

‘More dynamic market’

Shuzo Shikata, CEO of SBI Royal Securities, the bond’s sole underwriter, said it created a new and sustainable funding source for companies, allowing them and the Cambodian economy to continue with impressive growth.

“This bonds also help create a more dynamic market where investors now have more tools and strategies to invest their money,” Shikata said.

The International Financial Corporation has already committed to investing up to 80 billion riel to help establish the Cambodian bond market, while Vattanac Bank will invest 20 billion riel in the bond.

Cambodia Commercial Bank and Cambodian Reinsurance Company (Cambodia Re) decided to invest an undisclosed amount.

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