Danajamin, CIGF to explore new guarantee structures

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KUALA LUMPUR: Danajamin Nasional Bhd hopes to explore a variety of collaborative guarantee structures in its new partnership with the Credit Guarantee and Investment Facility (CGIF).

In a signing ceremony for a strategic collaboration agreement yesterday, the financial guarantee insurer said it will jointly undertake more varieties of transactions in Malaysia with the CGIF, a trust fund of the Asian Development Bank (ADB).

“This includes transactional collaboration involving obligors of the respective parties as well as cross-promotion of bond and sukuk guaranteed by Danajamin and the CGIF to local and foreign investors,” said Danajamin chief executive officer (CEO) Mohamed Nazri Omar in his speech.

He said in the course of the collaboration, Danajamin will identify and structure transactions in new themes and trends that include but are not limited to green bonds and socially responsible investments, to become the “new industry benchmarks”.

“We believe that it makes perfect sense for us to work with the CGIF as a collaborative partner as we have the same objective — to enable financially viable companies to tap the capital markets and to develop the capital markets at the same time,” he said.

He added that the collaboration will include two priority areas of capacity building and knowledge transfer.

CGIF CEO Kiyoshi Nishimura said the collaborative guarantee structures to be explored could include first loss reinsurance.

“We believe the guarantees we both issue today (yesterday) are only the basic foundations of a variety of other forms of credit support that can be introduced,” he said, citing partial guarantees and subordinated liquidity facilities for projects.

The CGIF was established as part of the governments of Asean +3 countries — consisting of the 10 Asean member countries and its three partners, China, Japan and South Korea — together with ADB, as part of a regional cooperation known as the Asian Bond Market Initiative.
 

(From left) Mohamed Nazri exchanging document with Nishimura at the signing of the collaboration agreement between Danajamin & the CGIF yesterday as Datuk Mohammed Hussein, Danajamin chairman (back left) and Datuk Wan Azhar Wan Ahmad, Credit Guarantee Corp Malaysia Bhd president and chief executive officer looked on. Photo by Suhaimi Yusuf.

 

This article first appeared in The Edge Financial Daily, on October 1, 2014.