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ABA announces plans to issue bonds

June 3, 2019  |  Source: Khmer Times

An ABA Bank branch in Phnom Penh's BKK.

ABA Bank, a member of the National Bank of Canada Group, plans to issue corporate bonds in the Cambodian capital market, which will make it the first banking institution to do so.

The bank said Friday in a press release that it will submit today the disclosure documents needed to proceed with the issuance.

ABA Bank recently obtained approval from the National Bank of Cambodia to begin the process of issuing corporate bonds in the Cambodia capital market, according to the press release.

SBI Royal Securities is acting as the sole financial advisor and underwriter for the landmark transaction, it added.

Seng Chan Thoeun, managing director and head of corporate finance at SBI Royal Securities, said the bank plans to raise $25 million from the issuance. Each bond will be priced at $25, he said.

"At the moment, we cannot announce a specific date as to when the bonds will be issued. After the disclosure documents are submitted to the Securities and Exchange Commission of Cambodia (SECC) on Monday, it will be at least a month before we hear back from the regulator," Mr. Chan Thoeun told Khmer Times yesterday.

"ABA Bank will become the first commercial bank in Cambodia to issue corporate bonds," he said, adding that so far only microfinance institutions have issued bonds.

Net proceeds from the bond issuance will be used for operating expenditure as well as growth in the lending business, which will support small entrepreneurs, including women, in rural areas, the bank said in the statement.

Mr Chan Thoeun took the opportunity to share his views on the development of the local capital market.

"During the first five years growth in the capital market was slow, but in the last two years it has been strong due to robust national economic growth and growing demand from the private sector," he added.

Last year, MFI Hattha Kaksekar Limited became the first company to issue corporate bonds in Cambodia, followed by LOLC (Cambodia) Plc in May.

As of May 31, ABA Bank's total assets stood to $3.36 billion, making it the third largest bank in Cambodia.