DANAJAMIN ISSUES RM500M TIER-2 SUBORDINATED SUKUK

Programme rated AA1 by RAM Ratings and AA+ by MRCB

DANAJAMIN Nasional Bhd, the country’s first financial guarantee insurer, has issued its inaugural tier-2 subordinated sukuk of RM500 million, which is part of a sukuk programme of up to RM2 billion for the issuance of senior and sub ordinated Sukuk Murabahah.

The subordinated sukuk would have a tenure of 10 years, with a callable option made available from year five onwards and was rated “AA1” by RAM Rating Services Bhd and “AA+” by the Malaysian Rating Corp Bhd (MRCB), it said.

The sukuk, which will be redeemed at its full nominal value upon maturity, is subordinated, unsecured obligations of the firm, ranking pari passu with any other existing subordinated, unsecured obligations of the company.

“This programme provides an alternative to the company in sourcing for additional capital. It will also boost Danajamin’s ability to meet its mandate of bringing new and viable firms into the debt capital market,” said chief executive officer Mohamed Nazri Omar.

The inaugural issuance was oversubscribed, receiving an overwhelming response of about RM800 million from a diverse range of investors achieving a yield of 4.80 per cent.

Hence, the issuance was upsized from the initial size of RM300 million to RM500 million, of which RM400 million is offered to investors and RM100 million via private placement.

“We are indeed very pleased to receive encouraging support by a wide range of investors that include asset managers, financial institutions, pension funds and insurance companies.

“This reflects the market confidence in Danajamin. We were able to attract a total of 16 investors to participate in this inaugural issuance,” he added.

The issuance also sees Danajamin strengthening its regulatory capital level, enabling it to continue meeting its developmental mandate to stimulate the bond/sukuk market. Bernama