Government Mulls Issuing Sovereign Bonds

Cambodia is considering offering sovereign bonds to raise more revenue for the national budget and move away from its dependence on overseas aid, a senior central bank official said Sunday. National Bank of Cambodia director-general Nguon Sokha said the Ministry of Economy and Finance was currently looking at other countries’ experiences with bond markets and was seeking outside help to issue the government’s first bonds. By issuing sovereign bonds governments can raise money from international investors that are usually paid back with interest at the end of a fixed term. … Ms. Sokha said there was no set date for when the bonds might be issued, but officials were working on the plan with help from the Asian Development Bank (ADB) and members of the Asean+3 group, which includes China, Japan and South Korea. … Cambodia is set to graduate this year or next to a lower middle-income country but still qualifies for overseas development assistance and concessional loans from international institutions. “For long term financing, we cannot really survive on development assistance,” Ms. Sokha said. … Although Cambodia does not currently issue sovereign bonds, it has been assessed recently by credit rating agencies. The most recent assessment by Moody’s gave the country a stable but high-risk “B2” rating, which means Cambodia is deemed to have “very low economic resiliency.”