What's Happening?
Yuanta Securities (Cambodia) Plc has launched an agriculture-focused corporate bond in Cambodia, aimed at financing large-scale fruit export production. The first tranche of this bond totals $50 million, part of a broader $100 million fundraising initiative.
The funds are designated for developing a 7,376-hectare farm in Ratanakiri province, focusing on banana, mango, and pineapple exports. This bond issuance marks the completion of Project Tulip, the first agriculture-focused corporate bond listed on the Cambodia Securities Exchange. The bond is backed by a 100% unconditional guarantee from GuarantCo, a provider of local currency credit solutions for infrastructure-related investments. The project aims to increase production to 272,000 tons by 2029, targeting export markets such as China and Japan.
Why It's Important?
This bond issuance is significant as it represents a diversification of capital market instruments towards primary agricultural production and export-oriented projects in Cambodia. By securing international-standard financing, Cambodia's agricultural sector is positioned to compete on a global stage, potentially transforming it from a traditional economic pillar into a sophisticated, high-growth frontier. The project also aligns with Environmental, Social, and Governance (ESG) frameworks, promoting sustainable agricultural practices. This development could attract institutional investment, enhancing Cambodia's economic growth and stability.
What's Next?
The second phase of the financing structure is scheduled for the first quarter of 2026, involving a $50 million secured loan with a 200% security coverage ratio. As the project progresses, it is expected to enhance Cambodia's export capabilities and strengthen trade ties with major markets like China and Japan. The success of this bond could pave the way for similar financial instruments in other sectors, further integrating Cambodia into the global economy.
