LOLC (Cambodia) Plc sold 800,000 guaranteed bonds in August and five subscription numbers took every one of them. At KHR 100,000 a bond that is KHR 80 billion, or USD 20 million at the rate of KHR 4,000 to the dollar its own documents use. It is also, to the unit, the ceiling the guaranteed part of that offering carried.
A subscription number is the account a buyer placed an order through. It is not the same as one investor. One number can carry several holders sitting behind a selling agent, the licensed firm that takes buyers’ orders.
LOLC’s results announcement of 20 August sets out five allotments: 400,000 units, 190,000, 150,000, 40,000 and 20,000. An allotment is the number of bonds a buyer ended up with. The largest took half the issue. The two largest together took close to three quarters of it.
These bonds carried a guarantee from CGCC, the government-owned company that promises to pay a lender back if a borrower cannot. Yuanta Securities (Cambodia) Plc, named on LOLC’s investor relation page as the firm that organised the sale, calls this the first bond issue CGCC has guaranteed. Cambodia Investment Review repeats it. Both carriers are the transaction’s own parties, so the label rests on one account.
On 3 September that outlet published an account of the closing. Its headline calls the issue oversubscribed. Its second paragraph says the same thing in the outlet’s own voice, with nobody named behind it. It then quotes Han Kyung Tae, Yuanta’s Managing Director. The oversubscription, he says, tells him there is real institutional appetite in Cambodia when the credit structure is right, and he expects this to become a repeatable template for issuers here. Oversubscribed means buyers offered more money than there was paper to sell.
The notice of 18 August says the USD 20 million of guaranteed bonds were fully subscribed. The results announcement of 20 August says the subscription was successfully completed. Neither filing uses the word, and neither carries an order book. An order book records what buyers asked for against what they got. Fully subscribed says every unit found a buyer. It says nothing about buyers the sale turned away.
No total-orders figure appears anywhere reached, and no column setting what was asked for against what was given. Not on LOLC’s announcement index, not on its investor relation page, not in either filing, not on any of CGCC’s own news pages, and not in either of the outlet’s two items. All of them were read on 3 September.
LOLC’s investor relation page says the regulator SERC cleared a KHR 200 billion offering on 22 June. SERC approves who may sell bonds to the public in Cambodia. The guaranteed bonds were KHR 80 billion of that. The rest, up to KHR 120 billion, was senior unsecured, where investors hold only the company’s promise with nothing set aside behind it. That larger part is 60 percent of the offering, and it is the part that did not proceed.
The same page sets the two out side by side. It marks the guaranteed bonds for institutional and high net worth buyers, at a minimum of USD 500,000. It marks the senior unsecured bonds public retail, at a minimum of USD 10,000. The part the issuer itself labelled retail is the part that did not happen.
The 18 August notice records SERC approval to postpone them. It gives LOLC’s reason as the company’s current robust liquidity position and funding requirements. It says a second phase is planned and a revised timetable will follow in due course. It also says the delay gives prospective investors more time to study the offering and prepare to take part in it. Neither filing, neither index and neither of the outlet’s items gives another reason.
That investor page also put a floor of KHR 2 billion on orders for the guaranteed bonds. Above the floor, orders went in multiples of KHR 400 million. At KHR 100,000 a bond, that is a floor of 20,000 units and steps of 4,000 above it.
Three of the five allotments fit the rule. The smallest, 20,000, is the floor exactly. Two do not fit. 150,000 sits 32.5 steps above the floor, and 190,000 sits 42.5 steps above it.
No permitted order could have come in at those two sizes. That is what partial allocation of a scaled-back order looks like, where a buyer asks for more than they get. It is equally what it looks like if the step rule governed orders and not allotments. The part of LOLC’s registered disclosure document covering subscription and allocation would settle which. That part has not been read for this account. Neither has the Khmer registered text, which the issuer marks as the official version of everything quoted here in English.
The outlet quotes Sok Voeun, Chief Executive Officer of LOLC (Cambodia) Plc, saying the response from investors reflects confidence in LOLC’s balance sheet and in the strength of the guarantee structure. It quotes No Lida, CGCC’s Chief Executive Officer, saying the bond shows what the guarantee framework was built to do and gives institutional investors at home the credit comfort they need. Both put the result down to the guarantee and to the borrower together. The bonds that would have separated the two, sold without the guarantee behind them, did not proceed.
The guaranteed bonds pay 5.75 percent a year. The postponed ones would pay 7.00, a gap of 1.25 percentage points. What LOLC pays CGCC for that promise appears in neither filing, on the investor relation page, or on any of CGCC’s own news pages. The gap is the space between two interest rates and not the price of the guarantee.
On 3 September, sixteen days after the notice, the offering was still on show as open in two places. Cambodia Securities Plc, one of five selling agents LOLC names alongside Yuanta, carried both parts of it with the order forms live and the 7.00 percent bonds marked available. LOLC’s own investor relation page carried the same two parts, the same August subscription dates, and no mention of the postponement. LOLC had filed each earlier step within two days of it happening.
Two accounts put the start of trading in the guaranteed bonds on 10 September. Cambodia Investment Review of 2 September presents itself as carrying a CSX announcement and quotes a CSX disclosure. Yuanta’s own list of transactions, read on 3 September, gives the same date. The exchange’s site answered that day but served an empty application frame, so its own listing record stayed out of reach.