After becoming the first lead of offshore bond sales, Hattha Bank relies much on the percentage to gain more Thai investors. However, a Thai banker argues that the institutional investors are actually very reluctant to add new credits. Back in 2020, the lender was previously a microfinance deposit-taking institution. But it encountered transformation as a commercial bank. In the past, the bank heavily depended on the parents’ funding and multilateral agencies.
Two years ago, the US International Development Finance Corporation leveraged a US$50m loan to Hattha Bank. This was to sustain its loan to micro, small, and medium enterprises, said IFR Asia. This occasion was likely to happen in critical industries like water and sanitation improvement in Cambodia. Socheata In, Hattha Bank treasury also affirms that the Bank plans a second bond issue in the local market next year. This is because the bank’s riel-denominated bond has matured.
Although the riel bond market is still nascent, this is with only five bonds listed on the Cambodia Securities Exchange. In addition, the liquidity is low. Plus, there are no government bond benchmarks. However, the government in Cambodia announced that they plan an inaugural issue of sovereign bonds above US$300m. This is a yield curve for one to five years. Based on the analysis, this strategy would help setting a benchmark for Hattha’s return. This would also set a return for the domestic market. Although, it might not be enough to meet the bank’s US dollar funding requirements, said IFR Asia.
Thus, Socheata argues that they will draw some funding as much as US$226. The bank wants new funding for as much as US$150m.