Find A Rating 
PRESS RELEASES
RAM Ratings affirms CGIF’s AAA rating
Published on 13 Dec 2024.
RAM Ratings has affirmed Credit Guarantee and Investment Facility’s (CGIF or the Fund) insurer financial strength ratings of AAA/Stable/P1.
The affirmation reflects CGIF’s policy mandate to develop the regional bond market as well as the sponsorship and continued support of its capital contributors – the governments of China, Japan, Korea and the 10 ASEAN countries (collectively, ASEAN+3) along with the Asian Development Bank.
CGIF saw a two-fold increase in the value of guarantees issued of USD584 mil in the 12-month period ending June 2024, in line with the pickup in the ASEAN+3 bond markets. Net of redemptions in the same period, the outstanding guarantee portfolio remained flattish at USD1.9 bil.
CGIF’s guaranteed portfolio proved resilient, thanks to its prudent origination strategies and vigilant portfolio management. Since the Fund’s inception, they experienced only two defaults involving a guaranteed exposure of THB4.08 bil (KNM Group Berhad in 2021, alongside XJ International Holdings Co. Ltd.’s , formerly known as Hope Education Group Co. Ltd., in March 2024. While CGIF has fully recovered its exposure on the latter, the prospect of recovery on the former remains uncertain although the Fund is optimistic of a positive resolution. CGIF’s robust capitalisation can comfortably withstand these defaults.
CGIF’s modest portfolio size and monoline focus exposes it to some degree of concentration risk. This risk is moderated by the Fund’s prudential limits on sector, industry and country exposures. While sector diversification is sufficient, exposures to Vietnam (20%) and Thailand (20%) is still relatively large though reduced in recent years.
CGIF’s liquidity position is strong, with highly liquid assets amounting close to 87% of its guaranteed portfolio as at end-June 2024, allowing it to comfortably meet any potential claims. CGIF’s leverage remained conservative at a low 1.1 times as at end-June 2024, well below RAM’s limit of 5.0 times threshold for an AAA rating.
Analytical contacts
Chew Chiang Lim
(603) 3385 2516
chianglim@ram.com.my
Sophia Lee
(603) 3384 2619
sophia@ram.com.my
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 2024 by RAM Rating Services Berhad
