Markets
Innovation to spark bond market interest
Cheah Chor Sooi | 10 Nov 2017 00:30
Danajamin is injecting confidence into 'non-triple A' issuances by partially guaranteeing certain transactions which have been accepted by investors, says Nazri
Danajamin Nasional Bhd is seeking to guarantee more bond issuances that have an exposure to an issuer’s standalone credit risk.

This will give investors more options to participate in the bond market. A standalone credit risk is the risk associated with a single operating unit of the issuer’s company or asset.

In recent times, Danajamin has been injecting confidence into “non-triple A” issuances by partially guaranteeing certain transactions which have been accepted by investors.

“Triple A” or AAA bonds are those considered safe bets by the bond rating agencies responsible for determining their grade. In other words, the bond rating agencies are signalling that they think default, ie investors not getting the money they were promised, is very unlikely to happen except in the most remote of circumstances.