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RAM Ratings affirms CGIF at AAA
Published on 16 Dec 2025.
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. Extraordinary government support for the Fund is assessed to be highly likely if required.
In 2024, CGIF extended 15 new guarantees amounting to USD772 mil, a notable improvement over 2023 (12 guarantees totalling USD403 mil). This has enlarged the Fund’s guarantee portfolio to USD2.4 bil as at end-June 2025, a 26% y-o-y increase. Sustained market engagements over the years have contributed to a better understanding of its guarantee mechanism and brand visibility. While bond issuances are largely influenced by market conditions, we believe these initiatives helped improve both pipeline and mandate conversions.
The portfolio has proven resilient, with only two defaults since inception thanks to prudent origination strategies and vigilant portfolio management. The sum defaulted on by XJ International Holdings Co. Ltd. (formerly Hope Education Group Co. Ltd.) in March 2024 has been fully recovered while the prospect of recovery from KNM Group Berhad after a 2021 default remains uncertain amid a prolonged resolution process. CGIF’s robust capitalisation can comfortably withstand these defaults.
Concentration risk from the Fund’s still-modest portfolio size and monoline focus is moderated by prudential limits on sector and country exposures. While sector diversification is sufficient, exposures to certain ASEAN countries are still relatively large though reduced in recent years.
CGIF maintains strong liquidity to meet claims. We anticipate its leverage ratio to stay below 2 times in the near term despite strong traction in guarantee activities. This is well below RAM’s AAA-rating threshold of 5.0 times for a high-risk guarantee portfolio.
Analytical contacts
Chan Yin Huei
(603) 2708 8296
yinhuei@ram.com.my
Chew Chiang Lim
(603) 2708 8297
chianglim@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@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.
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Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
© Copyright 2025 by RAM Rating Services Berhad
