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PPCBank officially lists its first corporate bonds

April 21, 2020  |  Source: Khmer Times

A PPCbank's staff member deals with a customer at a branch of the bank that has just listed corporate bonds.

PPCBank officially listed its first corporate bonds on the Cambodia Securities Exchange (CSX) on yesterday after obtaining the approval of the Securities and Exchange Commission of Cambodia (SECC) on its subscription and allocation results on April 10.

PPCBank successfully raised 40 billion riels (about $10 million) during the first phase of its bond issuance process amid the COVID-19 pandemic. The first phase investors have subscribed to foreign exchange-indexed bonds with an interest of 6.5 percent per annum and a maturity of three years.

A total of 400,000 bonds were issued during the first phase at a par value of 100,000 riels per bond. The bank plans to raise another 40 billion riels in its second phase in the next six months or so by carefully following the developments with regard to COVID-19.

Shin Chang Moo, president and CEO of PPCBank, said that the listing of the bank’s corporate bonds marks a new milestone for the bank. "I would like to take this opportunity to express my sincere appreciation to the regulators, investors and advisers that have made the issuance of our first public bonds possible," said Shin.

"At a time of high uncertainty and market volatility where securing liquidity is more important than ever, we are now one of the few financial institutions in Cambodia with access to the newest source of long-term funding," he added.

"Through the bond issuance, we were able to build a new investment relationship with reputable foreign and local institutional investors. I believe this is the first time that a local insurance company invested a meaningful amount in corporate bonds issued by a financial institution as an anchor investor. We believe the listing of our bonds will contribute immensely to our bank's reputation and brand as not only the leading commercial bank but also a trusted partner with customer-centric, innovative, and transparent business operations," said Shin.

He further added: "While still in the early stage of its development, the Cambodian capital market is expected to provide us with more flexibility and stability in terms of funding for the medium and long-term."

Sou Socheat, director-general of the Securities Exchange Commission of Cambodia (SECC), welcomed the move. He said that this is to build trust in the Cambodia Securities market. Although, it is in a tough situation, the CSX is stepping forward.

"This is a hard time and some investors will use this situation to close their businesses. However, for us, we strike forward," he added. "We encourage the PPCBank to continue the second phase at the appropriate time we agreed to show confidence to customers," he added.

CSX CEO Hong Sok Hour, said that PPCBank marked the fourth corporate bonds-listed company in the Cambodia stock market. PPCBank's issuance will provide a new source of funds and long-term investment. The listing with the CSX will expand the prestige of the bank and will help it to build trust with customers, investors and potential investors locally and internationally – and receive a tax break.

As of April 21, the CSX had nine listed companies, including five companies with the equity market, and four companies listed in corporate bonds. The nine companies had collected more than $171million funds from the CSX.

In the near future, the CSX will welcome other companies listing securities in the form of equity and corporate bonds. It will give more choice to customers wanting to invest in the stock market.