Credit & Bond Ratings in Cambodia: Building Trust, Market Discipline And Investor Access

Cambodia’s financial system is entering a more important stage of development.

For many years, economic growth was mainly supported by bank lending, foreign direct investment, real estate activity, trade, manufacturing, tourism and private-sector expansion. That model helped Cambodia grow quickly, but the next stage requires deeper capital markets, stronger issuer transparency, better risk pricing and wider investor participation.

Credit and Bond Ratings

A credit rating is not simply a letter grade. It is an independent opinion on an issuer’s ability and willingness to meet financial obligations. A bond rating goes further by assessing the specific risk of a debt instrument, including repayment capacity, security structure, guarantees, covenants, recovery prospects and instrument-level protections.

For Cambodia, ratings matter because they help move the market from relationship-based lending toward transparent, rules-based capital formation.

Cambodia’s economy remains sizeable and investable, but it also faces a more complex environment. The World Bank estimated Cambodia’s 2025 GDP at about US$50.5 billion, with real GDP growth estimated at 4.8% in 2025, projected to moderate to 3.9% in 2026 and recover to 4.9% in 2027. The same outlook notes that manufacturing FDI remains an important support, with FDI inflows reaching US$5.1 billion in 2025, or 10.1% of GDP.

At the same time, Cambodia’s capital market is becoming more active. The National Bank of Cambodia’s Financial Stability Review 2025 noted that the government bond market expanded significantly, with total government bond issuance reaching KHR 691.2 billion, or about US$172.2 million, and government bonds outstanding reaching KHR 990.5 billion. Corporate bonds also grew strongly, with outstanding corporate bonds reaching KHR 1.5 trillion, or about US$379.1 million, up 172.5% from the previous year.

That is precisely why ratings are no longer optional market decoration. They are becoming part of Cambodia’s financial infrastructure.

Why Credit & Bond Ratings Matter for Cambodia

Independent ratings can support Cambodia in several practical ways.

1/ First, they reduce information gaps. Investors, banks, regulators and market participants need a common language to understand credit risk. Ratings provide that language by converting complex financial, legal, operational and governance analysis into an understandable risk opinion.

2/ Second, ratings can help lower funding friction. A transparent rating does not guarantee cheaper funding, but it can make funding discussions more disciplined. Issuers with stronger governance, better disclosure, predictable cash flows and stronger risk controls are generally better positioned to attract investors.

3/ Third, ratings help Cambodia broaden its investor base. Domestic investors may understand local market conditions, but foreign investors normally require more structured disclosure. They need to understand sovereign risk, legal enforceability, foreign-exchange risk, transferability, recovery assumptions, ESG credibility and cross-border repayment mechanics.

4/ Fourth, ratings support regional credibility. Cambodia is not competing only inside Cambodia. It is competing for capital against Vietnam, Thailand, Malaysia, Indonesia and other emerging ASEAN markets. A stronger rating culture helps Cambodian issuers present themselves in a format regional and international investors can understand.

5/ Fifth, ratings strengthen market discipline. Once issuers know that governance, disclosure, leverage, liquidity, covenants, related-party exposure, ESG practices and risk management will be independently assessed, the quality of corporate behaviour tends to improve.

This aligns with Cambodia’s securities-sector development priorities. The Securities Sector Development Strategy 2025–2035 notes that Cambodia’s securities regulatory framework is robust and aligned with IOSCO principles and international practices, while also recognising that the development of the government securities market is important for deepening the corporate bond market. The same strategy also identifies constraints, including limited domestic savings capacity and the high level of US dollar transactions in Cambodia.

Andersen Consulting Cambodia’s Role

Andersen Consulting Cambodia is an accredited Credit Rating Agency in Cambodia, bringing independent, methodology-driven research, ratings and credit assessments to Cambodia’s developing capital market.

The firm delivers independent credit ratings, financial-strength assessments and risk analytics aligned with regulatory expectations. Public commentary has also highlighted Andersen Consulting Cambodia’s more than 25 years of regional and international ratings, research and analytical experience, combining global best practice with local market understanding.

This is important because Cambodia needs ratings that are both globally credible and locally grounded. International standards alone are not enough if they are not adapted to Cambodia’s legal, regulatory, banking, business and investor environment. Equally, local market knowledge alone is not enough if it is not supported by disciplined methodology, documentation, transparency and rating governance.

Andersen Consulting Cambodia helps bridge that gap by delivering independent, methodology-driven research, ratings and credit assessments aligned with both international standards and Cambodia’s regulatory framework. In practical terms, this helps Cambodian issuers strengthen transparency, improve investor communication, support better funding access and broaden participation from both domestic and cross-border investors.

Andersen Cambodia was recently recognised by SERC for contributions to Cambodia’s capital-market development, including support for a stronger, more transparent and more inclusive investment environment.

Beyond Regulated Ratings: SuperBankRatings

Beyond regulated credit ratings, Andersen Consulting Cambodia also deploys SuperBankRatings, a specialised financial-services research and benchmarking framework.

SuperBankRatings is positioned as Cambodia’s premier source for independent bank research, ratings, views and financial education. Its stated mission is to equip banks with strategic insights, close the information gap between banks and customers, and improve transparency, governance and compliance standards.

This is especially relevant for Cambodia’s banking and financial-services sector. Regulated credit ratings assess creditworthiness. SuperBankRatings adds another layer of institutional insight by benchmarking banks on areas such as governance strength, risk discipline, innovation, sustainability performance, market positioning, product quality, transparency and customer-facing performance.

This broader benchmarking framework can enhance institutional positioning. It gives banks and financial institutions a clearer view of where they stand, where they are strong, and where they need to improve. In a developing market, this type of benchmarking can support better governance, stronger customer trust and more informed investor engagement.

Localised “kh” Ratings vs International Ratings

One of the most important issues for Cambodia is the difference between a localised Cambodian national-scale rating, often expressed as a “kh” rating, and an international or global-scale rating.

A localised “kh” rating ranks credit risk within Cambodia. For example, a “kh AAA” rating may indicate that an issuer or bond is among the strongest credit risks on a Cambodian national scale. However, it is not automatically equivalent to an international AAA rating.

The reason is simple: a national-scale rating measures relative strength inside the country, while an international rating measures risk against a broader global universe of issuers and instruments.

A Cambodian bond may therefore be very strong domestically, but receive a lower international view because foreign investors will apply additional risk tests. These may include Cambodia sovereign risk, foreign-exchange and convertibility risk, transferability risk, offtaker risk, construction risk, operating risk, legal enforceability, ESG credibility and recovery uncertainty.

This is not a weakness of the Cambodian rating system. It is a necessary distinction.

A local rating helps domestic investors understand relative risk within Cambodia. An international rating helps global investors compare the Cambodian issuer or bond against issuers in other countries.

The International Investor Risk Overlay

For Cambodia, the most useful bridge between local and international ratings is the International Investor Risk Overlay.

This overlay explains why a bond may look strong domestically but lower under an international investor lens. It does mean that both Cambodian credit rating agencies are to use the same methodology. Rather, it encourages clearer disclosure of how each agency considers international investor risk factors while preserving CRA independence.

The International Investor Risk Overlay covers:

This overlay is critical for Cambodia because international investors do not only ask,

… “What is the rating?” … They ask, … “What does the rating mean, what does it not mean, where are the risks, how are they mitigated, and what happens if the transaction fails?”…

The Next Stages

Cambodia’s next stage of financial development will depend on more than growth alone.

It will depend on;

• Trust,
• Transparency,
• Governance,
• Disclosure, Investor confidence and
• Disciplined Capital Allocation.

Credit and Bond Ratings help provide that discipline.

• For issuers, ratings can improve credibility and investor communication.
• For investors, ratings can support risk comparison and due diligence.
• For regulators, ratings can support market discipline and transparency.
• For the Kingdom, ratings can help connect domestic growth ambitions with regional and international capital.

Andersen Consulting Cambodia, as an accredited credit rating agency, is well positioned to contribute to this development by combining international methodology, local market understanding, independent research and Cambodia-specific regulatory alignment.

The broader opportunity is not simply to rate Cambodian issuers. It is to help Cambodia build a more transparent, investable and institutionally credible financial market.

 Andersen Consulting Cambodia Master Rating Scale

The Andersen Consulting Cambodia Master Rating Scale is a positive step toward clearer market communication. It provides an internationally comparable long-term credit and bond rating framework, with rating categories from AAA to D and supporting descriptions for credit quality, default probability, recovery implications and instrument-level notching considerations.

One strong feature of the Andersen Consulting Cambodia Master Rating Scale is that it separates several issues that are often confused in emerging markets.

1/ It recognises that issuer ratings and issue ratings may differ. A company may have one credit profile, but a specific bond may be stronger or weaker depending on security, guarantee support, contractual priority, structural subordination, loss severity and recovery prospects.

2/ It also makes clear that ratings are opinions, not guarantees, and that no rating should be described as risk-free. Even the highest rating category does not eliminate market risk, liquidity risk, legal risk, regulatory risk, event risk or operational risk.

3/ The scale also identifies BBB- as the common investment-grade floor, with BB+ and below generally treated as speculative grade or high yield.

This type of rating scale is valuable for Cambodia because it helps investors see rating migration, investor eligibility and risk escalation more clearly. It also helps issuers understand what separates investment-grade strength from speculative-grade vulnerability.