CGCC's Bond Guarantee

CGCC’s Bond Guarantee Framework was approved by the Ministry of Economy and Finance on 17 May 2023. CGCC was accredited by the Securities and Exchange Regulator of Cambodia (SERC) as the bond guarantor on 22 August 2023. We were rated khAAA, the highest rating by the local rating scale, on 19 December 2023 and launched as the First Cambodian Bond Guarantor on 31 January 2024.

CGCC aims to provide guarantees on Khmer Riel denominated bonds listed on the Cambodia Securities Exchange (CSX) or registered with the Securities and Exchange Regulator of Cambodia (SERC) to support local companies raising funds and bond market development in Cambodia.

Benefits of Bond Guarantee

For bond market:

Encourage more bond issuances
Attract investors to invest in corporate bonds
Provide more investment alternatives or options to investors
Increase liquidity in bond market

For bond issuers:

Improve the credit rating of the guaranteed bond
Improve access to the bond market
Access to diversified sources of funding

For investor:

Provide more choices of investment
Provide protection against issuer’s default
Provide more confidence in bond investment

Bond Guarantee Features

Eligible Issuer

For the public offering of debt securities, the issuer must meet the requirements below:

Being a public limited company or permitted entity.
Having a Board of Directors’ resolution and shareholders’ approval on the public offering of the debt securities.
Having historical financial statements and/or consolidated historical financial statements for (at least) the last 2 (two) financial years which are audited in accordance with the existing law and regulations enacted in the Kingdom of Cambodia.
Having strong corporate governance with a clear management structure.
Having obtained credit rating from a credit rating agency accredited by the SERC.

2. For the private offering of debt securities, the issuer must meet the requirements below:

Being a company or enterprise that is legally registered in the Kingdom of Cambodia.
Having a Board of Directors’ resolution and shareholders’ approval on the private offering of the debt securities.
Having financial statements and consolidated financial statements for the last 1 (one) fiscal year prior to the latest accounting closing date, which have been independently audited in accordance with the laws and regulations of the Kingdom of Cambodia.
Having a credit rating from a rating agency recognized by the Securities and Exchange Regulator of Cambodia (SERC).
Encouraged to implement the corporate governance practices as specified in various regulations and guidelines on a voluntary basis.

CGCC’s Bond Guarantee Application Process

1. The Issuer submits a Letter of Intent along with the Preliminary Requirement Documents as follows:

Corporate Information (i.e. company profile, shareholder structure, shareholders, directors, committees, key managements, etc.)
Financial Statement Audited for the last 3 years at least
Bond Issuing Information (size, tenor, purpose, etc.)
List of Potential Investors
Issuer’s Corporate Governance (Corporate governance reports)
Issuer and Underwriter engagement letter
Other documents which may be required by CGCC as necessary

2. The Issuer shall submit the Bond Guarantee Application to CGCC after getting informed from CGCC on Eligibility with the Preliminary Requirements (if there’s any update) and the additional following documents:

CGCC’s Bond Guarantee Application Form
Business plan/budget plan of issuer including cash flow projection
Constitutional documents (such as memorandum and articles of incorporation, certificate of incorporation, patent, etc.)
Corporate approval (resolutions/extract of meeting minutes of the board of directors and/or shareholders)
Regulatory approvals (valid licenses, permits, and all regulatory approvals/authorizations, Merger & Acquisition)
Reports (Commercial due diligence including from financial, operational and market perspective, legal due diligence including tax, insurance, litigation, environmental and social impact, credit rating, and property evaluations report, etc.)
Security documents (hypothec and/or pledge agreements, etc.)
Significant agreement/contract with related parties
Other documents which may be required as necessary

3. Assessment of Issuer: CGCC assesses issuers regarding financial conditions, corporate governance, future strategic plan, etc.

4. Approval in Principle: CGCC offers Approval in Principle on the bond guarantee.

5. Due Diligence: CGCC conducts due diligence on issuer.

6. Effective Approval: CGCC offers Effective Approval on the bond guarantee.