Financial Guarantee for Bonds and Sukuk Issuance
Danajamin Nasional Berhad was established to facilitate and advance the bond/sukuk market in Malaysia and stimulate economic growth. It is owned by the Ministry of Finance and the Credit Guarantee Corporation Malaysia Berhand and is regulated and supervised by Bank Negara Malaysia.
To improve Malaysian companies’ access to long-term financing from the corporate bond market, Danajamin provides financial guarantees for bonds and sukuk issuances. In case of payment default, Danajamin will pay the principal and up to one coupon/profit to bondholders. The guarantees are unconditional and irrevocable.
Danajamin is rated AAA by the Malaysia Rating Corporation and by RAM Rating Services Bhd.
Eligible projects and transactions
An eligible bond/sukuk issuer has to be a Malaysian-incorporated company. The bond/sukuk issuance must be denominated in Malaysian Ringgit and proceeds have to be used primarily for investments within Malaysia. The issuer may be involved in infrastructure construction and operation. Companies need to be creditworthy and have a strong track record of good corporate governance and risk management.
- Costs: A guarantee fee reflecting the risk profile of the issuer, including credit standing, security arrangement, fundraising quantum and structure. It is calculated based on a risk-adjusted percentage of the nominal value of the guaranteed issuance plus one coupon/profit payment. The fee is payable annually in advance.