BerjayaCity Taps Bond Market To Finance Replanting Exercise
KUALA LUMPUR – Danajamin Nasional Berhad (“Danajamin”) announces that it is guaranteeing RM150 million ten-year Medium Term Note Programme of BerjayaCity Sdn Bhd (BerjayaCity), an oil palm plantation company. Of the RM150 million bond programme, RM105 million were issued today. The issuance comprises 6 tranches with tenure ranging from 3 to 8 years to match BerjayaCity’s financing requirement. The bonds were issued at AAA(fg) rating and fully subscribed.
Ahmad Zulqarnain Onn, Chief Executive Officer of Danajamin said, “BerjayaCity is the first plantation company that Danajamin is guaranteeing and we are very pleased to be able to provide support to the oil palm industry which is a key driver of the country’s economy. The long-term fixed rate financing made available through Danajamin’s guarantee helps to provide a better match to BerjayaCity’s financing requirement.”
The issuer, BerjayaCity, is an oil palm plantation company with over 15 years of business track record. The funds raised from the bonds issuance will be used for, amongst others, financing a replanting exercise.
“Danajamin’s guarantee enables more companies to tap the bond market for alternative funding option especially for projects which require fixed rate medium to long term funding. The increasing issuance will bode well for the development of the country’s bond market as a key source for fund raising,” added Zulqarnain.
Danajamin, the country’s Financial Guarantee Insurer was established as part of the government’s efforts to ensure that corporations will continue to have access to funding to finance their businesses. Specifically, Danajamin provides financial guarantee, a credit enhancement, to bond/sukuk issuances to help companies raise long-term fixed rate financing from the bond/sukuk market. The bond/sukuk market is an important alternative source of financing, as it complements the bank market. Its continuous development is critical in ensuring that Malaysian companies have several funding sources to finance their business expansion and investments.
All applications for Danajamin’s guarantee go through a transparent evaluation process and are approved by two levels of committees i.e. the Management Underwriting Committee and Board Underwriting Committee. In line with Danajamin’s Underwriting Principles, only applications with viable projects will be considered. At the onset, issuers are also required to state the purpose of funds utilization and clearly identify the source of repayment, which will be ringfenced and used towards bond repayment. To further protect Danajamin’s interest, the guaranteed bonds will be subjected to regular review and surveillance.
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.
Danajamin Nasional Berhad
Tel (03) 2299 2068, (012) 433 7718