Malaysia's Danajamin to guarantee bond, sukuk market

[KLSE] Malaysia's Danajamin Nasional Bhd, the country's sole specialised credit guarantor, plans to introduce partial guarantees to encourage a wider range of issuers in the country's conventional and Islamic bond markets, its top official said.

Malaysia is home to Asia's third largest bond market and has the world's biggest market for sukuk, but deals are dominated by highly rated issuers. Close to 90 per cent of all bonds and sukuk are rated AA or AAA.

Set up in 2009 to help develop the domestic debt market, Danajamin has provided guarantees for over 7 billion ringgit (US$1.92 billion) of issuance, 45 per cent of that amount in the form of sukuk.

The firm is one of a small but growing number of guarantors worldwide which support sukuk deals.