CGCC’s khAAA Rating Paves the Way for Expanding Cambodia’s Bond Market
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In a significant milestone for Cambodia’s financial landscape, the state-owned Credit Guarantee Corporation of Cambodia (CGCC) has earned a prestigious khAAA rating from the Rating Agency of Cambodia (RAC). This achievement comes on the heels of CGCC’s accreditation by the Securities and Exchange Regulator of Cambodia (SERC), marking it as the nation’s first institution dedicated to guaranteeing debt securities. The khAAA rating now empowers CGCC to play a pivotal role in supporting local businesses in issuing bonds, fostering economic development, and instilling confidence in the market.
The primary objective of this initiative is to boost the liquidity of the Khmer riel by facilitating the issuance of financial instruments and elevating the credit ratings of corporate bonds. As part of a broader strategy, this move aims to stimulate the sector’s growth and inspire greater market confidence among investors.
Wong Keet Loong, the CEO of CGCC, emphasized the significance of the khAAA rating, noting that it positions CGCC to provide assistance to small and medium-sized enterprises (SMEs) seeking additional funds through debt securities in the capital market. He stated, “The rating demonstrates the CGCC’s financial capacity to assist larger SMEs capable of issuing bonds to secure funding for their business expansion. CGCC remains instrumental in fostering economic development and in strengthening the trust and confidence of our partners.”
SERC’s director-general, Sou Socheat, confirmed that CGCC’s rating signifies its readiness to support other companies in issuing bonds on the Cambodia Securities Exchange (CSX). He elaborated, “CGCC is a guarantor in the Cambodian bond market, and its rating indicates the company’s soundness. Moreover, CGCC’s rating initiates the culture of rating in the market, building public confidence and showcasing the company’s commitment and willingness to actively engage in our bond market.”
This development follows CGCC’s meticulous preparation, which included formulating a comprehensive policy framework on bond guarantee. The Ministry of Economy and Finance endorsed this framework on May 17, 2023. Subsequently, on August 22, SERC officially accredited CGCC as a bond issuance guarantor, solidifying its role in supporting local companies and bolstering Cambodia’s securities sector.
Established under sub-decree No 140/ANKR/BK on September 1, 2020, CGCC introduced its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021. This scheme was designed to broaden access to formal loans from participating financial institutions (PFIs) for working capital, investment, and business expansion. As of December 22, the corporation’s outstanding loans amounted to $113.96 million, with a non-performing loan (NPL) ratio of 5.41%, reflecting its commitment to responsible lending practices. During this time, total claim payouts reached $123,336, underscoring CGCC’s support for 1,731 micro, small, and medium-sized enterprises (MSMEs) and 149 larger firms.
CGCC’s khAAA rating signifies a pivotal moment in Cambodia’s financial landscape, positioning the corporation as a key player in fostering economic growth, facilitating access to capital for businesses, and boosting investor confidence in the burgeoning bond market. As Cambodia’s first debt securities guarantee institution, CGCC is poised to make a lasting impact on the nation’s financial ecosystem.
Source: Phnompenh Post
