Friday, July 23, 2010

Danajamin makes headway in financial guarantee insurance for sukuk

KUALA LUMPUR: Danajamin Nasional Bhd has made headway to become the first financial guarantee insurer to provide an Islamic guarantee (or Al-Kafalah) for sukuk, with the issuance of the first Danajamin guaranteed sukuk programme.

It said on Friday, July 23 the RM75 million sukuk issued by LBS BINA GROUP BHD [], comprises of two tranches. The first tranche is a RM35 million four-year sukuk and the second a RM40 million five-year sukuk.

Its chief executive officer Ahmad Zulqarnain Onn said Danajamin is the first financial guarantee insurer to provide an Al-Kafalah guarantee for a sukuk programme.

"This achievement will further reinforce Malaysia's position as an Islamic Financing hub and we are proud to be able to contribute towards the development of this key industry,' he said.

LBS Bina, the issuer of the sukuk, is a property developer. The RM75 million issuance is part of a RM135 million seven-year Islamic commercial paper/Islamic medium term note programme.

The funds raised from the sukuk issuance will be used primarily for financing the CONSTRUCTION [] of several residential property development projects which are located in Puchong, Cameron Highlands and Batu Pahat respectively.

This is the second private debt securities guaranteed by Danajamin that have been issued to-date. The sukuk, issued at AAA (fg) rating, was fully subscribed.

'The positive reception towards LBS Bina's sukuk further reinforces investors' confidence towards Danajamin's guarantee. Our guarantee structure enables companies from a wide range of sectors to raise long-term fixed rate financing from the bond/sukuk market,' he said.

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