Danajamin, Bank Pembangunan co- guarantee West Coast Expressway sukuk

KUALA LUMPUR: Danajamin Nasional Bhd, the country’s financial guarantee insurer, has announced its collaboration with Bank Pembangunan Malaysia Bhd to co-guarantee West Coast Expressway Sdn Bhd’s (WCESB) RM1 billion sukuk of up to 21 years.
Under the co-guarantee collaboration, Danajamin guarantees the RM350 million tranche while the remaining tranche of RM650 million is guaranteed by Bank Pembangunan.
The sukuk, which are rated AAA(fg) and AAA(bg) respectively, were successfully issued last Friday and fully subscribed.
WCESB is the concessionaire to the West Coast Expressway project, which involves the development of a 233km inter-urban highway connecting the west cost of Peninsular Malaysia from Banting in Selangor to Taiping in Perak to be completed over five years.
WCESB is held by Kumpulan Europlus Bhd (80%) and Road Builder (M) Holdings Bhd (20%) with the latter wholly-owned by IJM Corporation Bhd.
Both shareholders are committed to ensuring the successful completion of the project, as evidenced by their respective undertaking in the shareholders agreement to subscribe for the required capital contribution in accordance with the funding terms of the project financing.
In line with general market practice of greenfield project finance, both shareholders also will take up each other’s required capital contribution to ensure there are no funding shortfalls in completing the project.
Funds from the sukuk will be used to part-finance all expenses associated with the West Coast Expressway Project including the development, design and construction of the highway.