First of its kind transaction with Danajamin guaranteeing the longer tenure of the programme
KUALA LUMPUR – Danajamin Nasional Berhad (“Danajamin”), the country’s Financial Guarantee Insurer, today announced it is part guaranteeing Ranhill Powertron II Sdn Bhd’s (“Ranhill Powertron II”) RM710 million 18-year Islamic Medium Term Notes programme. This is the first of its kind transaction for Danajamin whereby it is only part guaranteeing a bond/sukuk programme, specifically the longer end of the issuance.
Of the RM710 million programme, RM360 million (with maturities from 1 to 11 years) is issued on a standalone basis, while the remaining RM350 million (with maturities from 12 to 18 years) is guaranteed by Danajamin. The standalone portion is rated AA rating while the Danajamin-guaranteed portion, is rated AAAIS(fg). Today, RM690 million of the sukuk programme was successfully issued.
“The issuance is a result of Danajamin working with Ranhill Powertron II and their joint Lead Arrangers to come out with an optimal financial solution for the company. We are pleased to have played a role in assisting Ranhill Powertron II tap the longer end of the sukuk market, which is less liquid. This ties in with Danajamin’s objective to assist companies in accessing long term financing and to be a catalyst to stimulate the bond/sukuk market,” said Ahmad Zulqarnain Onn, Chief Executive Officer of Danajamin.
To date, Danajamin has provided guarantees for RM2.0 billion bond programmes.
An independent power producer (IPP), Ranhill Powertron II owns and operates the 190MW Rugading Combined Cycle Power Plant in Kota Kinabalu. Ranhill Powertron II has a 21-year power purchase agreement (PPA) with Sabah Electricity Sdn Bhd to supply electricity to meet Sabah’s growing demand for power. The power plant was constructed in 2009 and had since started operation.
Danajamin, the country’s first and only Financial Guarantee Insurer, was established by the Government to be a catalyst to stimulate and further develop the domestic bond and sukuk market. Danajamin’s objective is to provide financial guarantee, a credit enhancement, to bond/sukuk issuances to help viable 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 banking sector. Its continuous development is critical in ensuring that Malaysian companies have several funding sources to finance their business expansion and investments.
A AAA-rated company, Danajamin is jointly owned by Minister of Finance Incorporated (50%) and Credit Guarantee Corporation Malaysia Berhad (50%). It has a paid-up capital of RM1 billion with another RM1 billion callable capital. Danajamin is licensed under the Insurance Act 1996, and is regulated and supervised by Bank Negara Malaysia.
For more information about Danajamin, its services as well as its leadership, kindly visit our website www.danajamin.com
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