The Investor Guarantee (IG) is an alternative guarantee approach in which a financial guarantee insurance can be purchased by investors from Danajamin to protect against the risk of default / credit event in relation to a Bond / Sukuk that is enlisted under Danajamin’s investor guarantee programme (IG programme).
Potential issuers can apply to be enlisted into the IG programme. Danajamin will perform an underwriting assessment similar to the current approach prior to such enlistment. Once enlisted, Danajamin would stand-ready to issue the IG to any investor of the bond subject to payment of premium.
Guarantee premiums are paid by the investors of the bond. The investor can decide on the amount, tenure and timing of purchase of the IG.
Upon crystallisation of a payout event (e.g. default), Danajamin will make a payout in exchange for the bonds held by the investor.
The switch on option provides flexibility to investors to decide when credit protection is required