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ABA gets regulator's approval to issue bonds

July 24, 2019  |  Source: Khmer Times

An ABA Bank branch office in Phnom Penh.

The capital market regulator on Tuesday approved ABA's request to issue bonds in the Cambodia Securities Exchange (CSX).

Advanced Bank of Asia Limited (ABA Bank), a member of the National Bank of Canada Group, is set to become only the third company to issue bonds at CSX, following in the footsteps of Hattha Kaksekar Limited and LOLC.

The bank plans to raise 128 billion riel (about $32 million) with a maturity date of three years and an annual coupon rate of seven to 7.75 percent.

Zhiger Atchabarov, chief international operations officer at ABA, confirmed that the listing has received the approval of the Securities and Exchange Commission of Cambodia (SECC) and said the bank will now begin preparing other documentation needed for the issuance.

"Yesterday we received SECC's approval in principle, but there are a few other procedures that must be completed before the final listing. We will follow all legislative and regulatory requirements needed for the issuance of the bonds," he said.

Kim Sophanita, director of the market operations department at CSX, said that after securing CSX and SECC approvals, ABA can now begin the booking, building and subscription process to set the final interest rate (yield) of the bond, open the subscription, and finally list on CSX.

"By listing on CSX, ABA's credibility will be strengthened and it will gain access to tax incentives. We believe ABA's listing will encourage other commercial banks to consider raising capital through the Cambodian capital market," she said.

Mr Zhiger said the bank will now begin a roadshow targeting potential investors and start the bond subscription process.

"We are working according to the existing procedures. We plan to finish the listing in August," he said.

"Our listing on CSX reflects our confidence in the growing economy and the development of the Cambodian capital market. Our decision to list is also part of our strategy to support the national currency, the Cambodia riel," he added.

Mr Zhiger said that capital raised from the bourse will be invested in supporting small and medium enterprises, particularly those founded or led by women.