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Thursday, July 14, 2011

Danajamin takes on more complex deals

Kuala Lumpur: Danajamin Nasional Bhd expects to guarantee another RM1.6 billion worth of facilities this year after backing some RM1.4 billion in the first half of the year.

"We'll be seeing a more diverse set of industries being guaranteed from now on as well as more complex deals being approved," Danajamin chief executive officer Ahmad Zulqarnain Onn told reporters from the New Straits Times Press (NSTP) group yesterday.

Danajamin guarantees enhance the credit ratings of non-"AAA" rated issuers, enabling them to access longer term capital via the bond market at more attractive rates.

Ahmad Zulqarnain led an eight-member delegation of Danajamin top management on an official visit to Balai Berita, NSTP's headquarters, in Bangsar, Kuala Lumpur, yesterday.

He explained that last year saw guarantees approved for mostly property companies because those deals were easier to process compared to, for example, independent power producers, which are more complex.

Danajamin aims to guarantee some RM3 billion worth of facilities in a year.

The institution has a underwriting capacity of up to RM15 billion across all sectors. To date, it has guaranteed facilities worth RM2.305 billion.

Ahmad Zulqarnain said while the institution is focused on its mandate to help more corporations raise funds from the bond market, it is also exploring the possibility of securitising loans from small and medium enterprises.

"We started looking at it after receiving enquiries from some banks, but it is still at the exploratory stage. It's more of a long term plan," he said.

Ahmad Zulqarnain added that securitisation should be on an existing portfolio with a track record. This way, the exercise would add to lending capacity.

"We need to understand the issues before we can proceed," he said.

Securitisation of loans has been a controversial issue following the subprime crisis which crippled the US economy in 2007.

By Business Times

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