NagaCorp, which operates the NagaWorld Integrated Resort in Phnom Penh, issued this year’s best high-yield bond, Hong Kong-based FinanceAsia said.
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The announcement was made at the Annual Achievements Awards for the most outstanding deals on Dec 4.
NagaCorp issued $300 million of bonds in May this year and the transaction snapped FinanceAsia’s award, which highlights the most outstan ding deals across the region.
The sale of the bonds, which have a 9.375 percent coupon rate and mature on May 2021, made NagaCorp the first Cambodian issuer of offshore bonds.
Credit Suisse and Morgan Stanley were the joint bookrunners and coordinators for the issuance, while US-based Latham & Watkins and DFDL managed the legal aspects of the deal. Freshfields Bruckhaus Deringer, Maples & Calder and HML Law Group acted for the issuer.
As this was the first-ever bond issue from Cambodia, the “jurisdiction was a key challenge for book runners and investors in forming an opinion on fair value,” the International Financing Review, a capital markets news provider, said. Roadshows were held in Asia, London, New York and Boston to engage with potential investors.
The accolade marks another win for NagaCorp’s management team, which is led by medical doctor and Founder/chief executive Chen Lip Keong.
NagaCorp is investing heavily into an international expansion plan. The upgrades at Naga1 will help all facilities match the quality at Naga2, which opened in late 2017.
The Integrated Resort particularly chose Cambodia as its next stage of expansion plan; the Founder has said during the opening of Naga2 in November last year, adding that “NagaCorp believes in helping the host nation in building tourism and the economy of Cambodia.”
“We expect NagaCorp to incur high capital expenditure over the next one to two years,” S&P Global Ratings said on Nov 28.
Still, S&P raised its long-term issuer credit rating on NagaCorp to ‘B+’ from ‘B’ with a stable outlook, citing the company’s outstanding performance over the years in Cambodia.
NagaCorp has already ventured overseas, with another Integrated Resort due for completion in early 2020 in Vladivostok.
Investors have reacted well to NagaCorp’s expansion plan, which comes amid increasing revenue which is attributing to better international visitation into Cambodia.
In the first half of 2018, compared with the same period last year, NagaCorp achieved financial performance for the period with gross gaming revenue (GGR) increasing by 85 percent to $713.9 million, and net profit for the period increasing by 20 percent to $180.1 million.
VIP gaming revenue grew 162.6 percent in the first half of 2018 compared with the same period last year, taking NagaCorp’s total revenue to $732.96 million. Net profit rose 19.6 percent to $180.13 million.
The company’s Hong Kong Stock Exchange-listed shares have also been rising over 53 percent over the past year.
NagaCorp is also set to benefit from reduced uncertainty in Cambodia following this year’s national elections, bolstering expectations for steady operating performance over the next 12 months, ratings agencies say.
Over the years, NagaCorp has repeatedly stated that the group has tremendously benefitted from the political stability and a stable policy environment in Cambodia, led by Prime Minister Hun Sen who has led the country to robust and vibrant economic growth.
“The improved operating conditions also translate into lower transfer and convertibility risk for Cambodia,” S&P said, referring to the freedom of dividends payment from Cambodia to overseas investors which are another plus in the present government financial policy.