$500,000 of Phnom Penh Commercial Bank (PPCBank) bonds were traded on the secondary market yesterday, selling at their face value of 100,000 riels.
The transfer of the 20,000 units confused the market after PPCBank bonds had been sold at a premium only two weeks ago, creating the first “fair market” value for bonds listed on the Cambodia Securities Exchange (CSX).
However, speaking yesterday, Han Kyung Tae, managing director of Yuanta Securities (the lead manager for the bond issuance), said the trade was an intercompany transfer and hence did not represent a “fair market” value for the bond.
“While I cannot disclose the company that transferred the bonds, I can say this was not a sale between two parties and hence should not be interpreted as a “fair market” [transaction in] the local bond market,” Han said.
“The company that purchased the bonds on the primary market decided to transfer them within a subsidiary. The transfer was at the bond’s face value of 100,000 riels with a slightly higher yield-to-coupon ratio to cover the daily interest accrued,” Han added.
Last month PPCBank’s foreign exchange-indexed bonds became the first corporate bonds listed on the CSX to be traded on the secondary market.
The undisclosed buyer and seller transferred 40,000 units (out of 400,000 in the block) with a par value of 100,000 riels ($25) each, selling at a premium of 105,309 riels a unit.
The trade represented a “sold at a yield-to-maturity (YTM)” of 4.5 percent, down from the initial YTM of 6.5 percent listed in April this year with 867 days left until maturity.
PPCBank has successfully raised 80 billion riels ($20 million) in corporate bonds from two separate listings this year. Both the first and second phase bonds had a coupon rate of 6.5 percent per annum with a maturity date of three years.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.