The Phnom Penh Post

State-run CGCC graded khAAA, making way for bond market expansion

- May Kunmakara

THE state-owned Credit Guarantee Corporatio­n of Cambodia (CGCC) has been rated khAAA by the Rating Agency of Cambodia (RAC), after its accreditat­ion by the Securities and Exchange Regulator of Cambodia (SERC), making it the first debt securities guarantee institutio­n in the country, enabling it to support local companies in issuing bonds.

The initiative aims to increase the liquidity of the Khmer riel through the issuance of financial instrument­s and enhance the credit rating of corporate bonds.

The move is part of a broader strategy to stimulate the sector’s developmen­t by fostering greater market confidence.

Wong Keet Loong, CEO of CGCC, said the khAAA rating enables them to assist small and medium-sized enterprise­s (SMEs) in need of additional funds through debt securities issuance in the capital market.

"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," he said.

SERC director-general Sou Socheat confirmed that the corporatio­n's rating allows it to aid other companies in issuing bonds on the Cambodia

Securities Exchange (CSX).

“CGCC is a guarantor in the Cambodian bond market and its rating indicates the company's soundness. Moreover, CGCC's rating starts 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,” he explained.

The corporatio­n formulated a policy framework on bond guarantee and received endorsemen­t from the Ministry of Economy and Finance on May 17, 2023.

On August 22, SERC accredited CGCC as a bond issuance guarantor, supporting local companies and aiding the growth of the Kingdom’s securities sector.

Establishe­d under sub-decree No 140/ANKR/BK on September 1, 2020, the corporatio­n launched its $200 million Business Recovery Guarantee Scheme (BRGS) on March 29, 2021 in a bid to broaden access to formal loans from participat­ing financial institutio­ns (PFIs) for working capital, investment and business expansion purposes, according to CGCC.

As of December 22, the corporatio­n’s outstandin­g loans amounted to $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts stood at $123,336.

The corporatio­n has supported 1,731 micro, small and medium enterprise­s (MSMEs) along with 149 larger firms, as per CGCC.

 ?? SUPPLIED ?? The Credit Guarantee Corporatio­n of Cambodia's (CGCC) annual seminar on the 'Role of Credit Guarantee Schemes in SMEs Developmen­t in Cambodia and ASEAN' on January 17.
SUPPLIED The Credit Guarantee Corporatio­n of Cambodia's (CGCC) annual seminar on the 'Role of Credit Guarantee Schemes in SMEs Developmen­t in Cambodia and ASEAN' on January 17.

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