Telcotech Ltd, a telecom infrastructure company under the Royal Group of Companies, has launched its official USD $20 million bond on the Cambodia Securities Exchange (CSX) for the second time, following its initial USD $20 million listing in 2021.
The inauguration of the second bond listing, known as the ‘Telcotech Public Bond’, took place on January 19, 2024, at the CSX building. The bond is guaranteed by the Asian Development Bank-backed Credit Guarantee and Investment Facility (CGIF), with a total issuance size of approximately KHR 82.08 billion (equivalent to USD $20 million).
According to a statement from the CSX, funds raised from this offering will be utilised to stimulate the company’s business growth, with a particular focus on expanding and developing its fibre optic network infrastructure. Royal Group Securities (RGS) serves as the sole underwriter and financial advisor for the listing of Telcotech.
Issuing Telcotech’s Second $20 Million Bond On The CSX
The issuance of the Telcotech bond took less than a month from its application on December 26, 2023, the CSX shared.
“This second listing demonstrates that companies, whether listing their stocks or bonds, can be issued for a second time with ease, in less time and at a lower cost,” said H.E Hong Sok Hour, CEO of the CSX, during the listing event.
“CSX is the best choice to support business owners who need capital, especially amid the unfavourable economy. They should recognise the diversification of capital as stocks, loans, or bonds,” he further urged.
He added that most of the listings on the CSX have been green or sustainable bonds and guaranteed bonds backed by CGIF, Guarantco, or CGCC (Credit Guarantee Corporation of Cambodia).
Sok Hour also encouraged investors to invest in stocks or bonds that will provide them with an interest rate ranging from 6 to 8 per cent.
Quah Chin Hong, CEO of Telecotech, shared that the company is a member of the Asia-American Gateway, Malaysia-Cambodia-Thailand Submarine Consortium, and the first company in Cambodia to have International Standard Organisation (ISO) certification.
He said that this second listing of bonds on the CSX will help catapult the company into a position of greater strength and enable Telcotech to deliver broader connectivity across the region.
“With this, we will invest in expanding our domestic network infrastructure, ensuring comprehensive coverage throughout the nation to strengthen our connectivity and improve service delivery to all valued customers,” said Quah. “Telcotech will continue to enhance international connectivity in the region and the Indochina region, establish state-of-the-art data centres, and provide premium hosting and management services.”
Anuj Awasthi, CGIF Vice President of Operations, described the collaboration between Telcotech and CGIF as a significant milestone that displays their continued commitment towards the development of the local currency market in the ASEAN+3 region.
“By guaranteeing Telcotech’s second public bond, CGIF would like to underscore its role in enhancing market confidence and stimulating investor interest, particularly in emerging markets like Cambodia,” said Awasthi.
Things To Know About Telcotech’s 2024 Bond Listing On CSX
Corporate bonds offered by Telcotech are priced at KHR 100,000 (approximately USD $24) with a net coupon Secured Overnight Financing Rate (SOFR) of 2.5 per cent per annum. The bonds have a five-year maturity with a semi-annual payment and USD settlement arrangement.
Telcotech’s 2024 bond is a guaranteed bond fully backed by the CGIF.
- Type of corporate bonds: Unsecured, unsubordinated, and guaranteed bonds in a registered form.
- Total number of corporate bonds: 823,000 bonds.
- Total issue amount: KHR 82.30 billion (or its equivalent in USD, up to USD $20 million, whichever is lower).
- Minimum investment amount: KHR 20 billion (approximately USD $5 million) and in multiples of KHR 4 billion (approximately USD $1 million).
- The bond is only offered to Qualified Investors (defined as “Institutional Investors” and “High Net Worth Investors” according to the Prakas on Qualified Investors of the Securities and Exchange Regulator of Cambodia).
Cambodia Securities Exchange Aims For Daily Trade Of $100M In 2030
Recently, the CSX launched and introduced a new USD settlement mechanism to facilitate investor trading. According to their statement, traders can buy and sell quotations in Khmer Riel but settle trades in US dollars based on the pre-closed exchange rate determined by the Exchange.
Sok Hour explained that the CSX aims to make the securities exchange fully supportive of the private sector’s growth, generating income for the people of Cambodia and contributing to the development of the national economy.
As of January 2024, there are 23 companies listed on the CSX. Among these, 11 are listed as equity securities, while 12 are listed as corporate bonds. The total raised from the capital market amounts to USD $379 million.
According to Sok Hour, the average daily trading value of the Cambodian stock market currently stands at around USD $210,000. The CSX hopes to increase the number of trading accounts to 100,000 by 2024, with a long-term goal of achieving an average daily trading value of USD $100 million by 2030.
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