RAM Rating reaffirms CGIF’s AAA ratings

Published on 15 Jan 2021.

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RAM Ratings has reaffirmed the AAA/Stable/P1 insurer financial strength ratings of Credit Guarantee and Investment Facility (CGIF or the Fund) on our global, ASEAN and national scales. The ratings reflect the Fund’s conservative leverage and strong liquidity along with its prudent investment appetite. While the COVID-19 pandemic will heighten the credit risk of CGIF’s guaranteed portfolio, the impact is likely to be manageable given the Fund’s vigilant monitoring process. The ratings also consider the Fund’s policy mandate to develop bond markets in the ASEAN region as well as the sponsorship and continued support of its contributors – the governments of China, Japan, Korea and the 10 ASEAN countries (collectively, ASEAN+3) as well as the Asian Development Bank (ADB).

CGIF is a trust fund of ADB, established as part of the Asian Bond Markets Initiative with a mandate to develop and strengthen the integration of local-currency bond markets in the ASEAN+3 region. CGIF’s major capital contributors have continued to demonstrate support for its cause by their subscription to the Fund’s recent USD500 mil capital raising exercise. To date, CGIF has received USD402 mil out of the USD449 mil committed. 

In 2019, CGIF issued six deals amounting to USD492 mil, bringing its portfolio size to USD1.6 bil. We expect the Fund to close 2020 with an estimated USD311 mil of new guarantees, which will expand its guarantee portfolio to USD1.9 bil. Including new deals and additional capital contributions, CGIF’s leverage will reach 1.1 times as at end-December 2020, well within the 2.0-time limit for the Fund’s ratings. Liquid assets of about USD1.2 bil as at end-June 2020 provide a comfortable buffer to meet liquidity needs should claims arise.

CGIF’s relatively small portfolio and monoline focus render it inherently susceptible to concentration risks. While the Fund has a large exposure to Vietnam (38%) and Thailand (22%) as at end-September 2020, its prudent risk management practices impose sector and country limits to mitigate the risk. CGIF’s risk exposure across sectors is well diversified and the Fund’s guaranteed portfolio primarily comprises issuers with a strong market presence in their respective countries, with relatively satisfactory financial profiles. As such, we expect these entities to be more resilient during the current economic downturn. 


Analytical contact
Hafiz Abdul Aziz
(603) 3385 2534

Media contact
Padthma Subbiah
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2021 by RAM Rating Services Berhad

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