NBC Starts Bonds Issuance

The currency of Cambodia. Photo: National Bank of Cambodia

PHNOM PENH – A first round of 100 billion riels (approximately $25 million) of sovereign bonds will be issued by the National Bank of Cambodia (NBC) on Sept. 7, 2022.

It will be the first time in Cambodia’s history that the country issues sovereign debt securities. The bonds will be auctioned via the NBC Platform (NBCP) from 8 a.m. to 2 p.m.

The Ministry of Economy and Finance will issue these sovereign bonds with a one-year maturity and a par value of $250 per bond. Investors will receive a fixed interest rate of 2 percent per annum that is to be paid once every six months by the state, based on the purchase date of the bonds.

Aun Pornmoniroth, Minister of Economy and Finance, explained that investors who purchase sovereign bonds will enjoy a 50 percent deduction of withholding tax on the interests earned from possessing and trading them. Investors will also enjoy a tax exemption on capital gains from purchasing and trading sovereign bonds with a three-year maturity, which will be issued later on.

On Aug. 25, the government announced it would issue its first-ever sovereign bonds, with a total value of $300 million.

The government’s decision aims to strengthen the country’s capital sector. The funds raised will finance government spending on socio-economic development projects. They will serve as financial instruments for institutional investors such as banks, insurance companies, the National Social Security Fund, or pension funds.

Three different maturities, respectively one year, three years, and five years, will be offered to investors. The one-year maturity and five-year maturity bonds, worth $24.57 million each, will be issued twice in a four-week period, while the three-year maturity bonds, worth $49.11 million, will be issued four times in another four-week period. The total is worth around $300 million of sovereign debt.

Bonds will be traded on the Cambodia Securities Exchange (CSX), Cambodia’s national stock exchange, which was launched on April 18, 2012.

Ten years after its establishment, 16 companies have listed and registered for the issuance of shares and bonds. So far, they have raised over $280 million from the market.

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