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23 March 2010

Danajamin Announces Inaugural Guarantee Agreement to Guarantee Kencana Petroleum Berhad’s RM250 Million Sukuk Issuance

Danajamin announced that it has entered into an agreement to guarantee Kencana Petroleum Berhad’s RM250 million Sukuk Mudharabah programme.

A Total of RM1.4 Billion Guarantees Approved By Danajamin To-Date

KUALA LUMPUR – Danajamin Nasional Berhad (“Danajamin”) today announced that it has entered into an agreement to guarantee Kencana Petroleum Berhad’s (“Kencana”) RM250 million Sukuk Mudharabah programme. This marks a key milestone for the country’s first financial guarantee insurer which was established to help financially viable Malaysian companies tap the sukuk/bond market for capital-raising. To-date, Danajamin has approved a total of RM1.4 billion guarantees for companies in various industries such as oil and gas, property & construction, plantation and infrastructure.

Under the agreement, Danajamin will provide an Al-Kafalah Guarantee for Kencana’s seven-year Sukuk Mudharabah Medium Term Note programme. With Danajamin’s guarantee (or “wrap”), the issue will be rated AAA, thus allowing Kencana to raise funds from the sukuk market at a competitive rate. The funds raised will be utilized by Kencana to acquire at least three offshore support vessels, including two anchor handling tug supply vessels, for charter to the oil & gas industry.

Ahmad Zulqarnain Onn, Chief Executive Officer of Danajamin said, “We are pleased to announce our inaugural guarantee transaction with Kencana. The RM250 million credit enhancement provided by Danajamin’s wrap will support Kencana with its strategic expansion into the offshore support vessel segment, which will complement its existing businesses. It will also allow Kencana to access the domestic sukuk market at a competitive rate, therefore delivering cost savings to its funding programme, while providing the company with long-term funds that matches its asset profile.”

“Kencana’s investment into the offshore support vessel segment will stimulate additional economic activity and create additional employment. This fits squarely with Danajamin’s mission of supporting companies which are investing in Malaysia and generating positive multiplier effects on the economy,” added Zulqarnain.

Danajamin, the nation’s first financial guarantee insurer, was established with the objective of providing financial guarantee insurance for bond and sukuk issuances to facilitate capital-raising by Malaysian companies. In providing a guarantee, Danajamin focuses on three key fundamental areas: the intended purpose of the fund-raising, the source of repayment of the issuance and the structure of the bonds to be guaranteed. A robust evaluation process and risk management system has also been put in place to manage Danajamin’s risk.

About Danajamin

Danajamin Nasional Berhad is Malaysia’s first Financial Guarantee Insurer.A AAA-rated company, Danajamin providesfinancial guarantee insurance to bonds and sukuk issuances to facilitate capital-raising by Malaysian companies from the debt capital markets. The establishment of Danajamin forms part of the Government’s on-going effort to ensure the continued flow of credit in the financial system to businesses. Danajamin is wholly owned by the Malaysian Government and has an issued and paid-up capital of RM1 billion with a capacity to underwrite policies of up to RM15 billion. It is licensed under the Insurance Act 1996, and is regulated and supervised by Bank Negara Malaysia.

Visit www.danajamin.com for more information.

Media Contact

Ann Lim
Head, Communications
Danajamin Nasional Berhad
Tel (03) 2299 2068
Email: ann@danajamin.com

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