Danajamin guarantees EXSIM Group's RM130m sukuk

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KUALA LUMPUR (Jan 29): Danajamin Nasional Bhd announced today it is guaranteeing EXSIM Development Sdn Bhd (EXSIM Group)'s RM130 million sukuk issuance to raise funds to free up its capital invested in two property development projects to allow the group to pursue other quality property projects.

The sukuk is issued via EXSIM's wholly-owned subsidiary Exsim Capital Resources Bhd's (ECRB).

In a statement today, Danajamin said the RM130 million sukuk issued under the EXSIM Group's Tranche 1 Sukuk Murabahah Islamic Commercial Paper (Tranche 1 ICP) Programme of RM1 billion is a credit enhancement to the group's RM290 million Tranche 1 Sukuk Musharakan Islamic Medium Term Notes Programme of RM2 billion (Tranche 1 IMTN), an AA3-rated sukuk programme that marks EXSIM Group's first successful issuance.

The issuance also marks Danajamin's second transaction involving the securitisation of progress billings of property development projects in Malaysia.

Danajamin said the funds made available from the ECRB issuance will free up the capital the EXSIM Group invested in the property projects D'Nuri and Nidoz, both located in Desa Petaling, Kuala Lumpur.

The financial guarantee issuer's chief executive officer Mohamed Nazri Omar said Danajamin recognises that EXSIM Group is one of the property developers in the market that focuses on eco-friendly and sustainable projects.

"As a catalyst, it is essential that we (Danajamin) continue to encourage the growth of socially responsible companies. Today, we are very proud to be supporting another corporate in the mid-market sector to raise financing," he said.

"We look forward to facilitating the EXSIM Group to realize their first corporate social responsibility involving the development of an affordable housing project (D'Nuri). Despite the challenging property market, both D'Nuri and Nidoz appealed to house buyers through the combination of quality, affordability and strategic location.

"The projects have seen a solid take-up with close to 100% as of fourth quarter of 2018. We hope our participation in this transaction will propel EXSIM Group further and bolster the government's initiative towards affordable housing scheme," he added.

The Tranche 1 ICP's sukuk structure is developed, arranged and advised by NewParadigm Capital Markets Sdn Bhd, a corporate finance advisory firm licensed by the Securities Commission Malaysia, whilst the lead arranger and lead manager is United Overseas Bank (M) Bhd.

To date, Danajamin said its guarantee has assisted 38 issuances, with a total guarantee size of RM10.7 billion. The total market impact of these deals, through risk-sharing collaboration with partner banks, stands at RM21.2 billion.