PRESS STATEMENT
MARC Assign CGC ‘AAA’ Issuer Credit Rating
Credit Guarantee Corporation Malaysia Berhad (CGC), a leading credit guarantee institution serving the small and medium enterprises (SMEs) in the country, has attained a ‘AAA’ issuer credit rating from Malaysian Rating Corporation Berhad (MARC).
The rating reflects CGC’s healthy financial fundamentals, its sound credit culture, adequate risk governance procedures, loan guarantee schemes portfolio effectively managed and mitigated, the intrinsic liquidity of its assets, strong shareholder support especially Bank Negara Malaysia (BNM) and the strength of its management team.
ìWe are delighted to obtain ‘AAA’ issuer credit rating as it is a key to the expansion of our core business, that is, the provision of credit guarantees to SMEs. With this rating and its expanded role under the transformation plan, CGC will provide a mechanism to link SME borrowers and lenders with investors in private capital markets,î said CGC’s Managing Director, Datuk Wan Azhar Wan Ahmad.
The ‘AAA’ rating, a pre-requisite to be recognised in the capital market, is expected to strengthen the development of CGC’s credit enhancement role, especially in the area of securitisation of SME loans where CGC’s role as credit enhancer is vital.
ìEssentially, CGC would be instrumental in creating an avenue for the SMEs to tap the capital market while at the same time encouraging the capital market investors to be indirectly involved in the development of our SMEs,î Datuk Wan Azhar added.
He further added that the capital market is an alternative source of funds that SMEs can tap into and enjoy not only competitive but more importantly, attractive rates than those offered by the financial institutions. îWith its backing as a credit enhancer of ‘AAA’ issuer credit rating, CGC makes it possible for SMEs to access the capital market for funds and enjoy better rates,î he said.
ìThe credit rating enhances CGC’s potential to raise funds through the issuance of private debt securities to fund its various programmes designed specially to meet the needs of SMEs, which is commonly done in the developed countries such as Germany, Japan and South Korea,î he further added.
Entry into the capital market is part of CGC’s 3-year transformation plan, which will see it transforming itself from a traditional credit guarantee provider to a financially sustainable institution that offers a wide range of products and services to SMEs.
CGC, formed in 1972 to assist in SME development, has been instrumental in the establishment of more than 360,000 SMEs, guaranteeing a total of RM35 billion in value. It posted 21.2% increase in revenue from RM200.9 million in 2005 to RM243.6 million in 2006. Its investment income also saw an increase, registering 15.2% growth from RM127.5 million to RM146.9 million in 2006 with net profits reaching RM119.2 million.
With the increase in the Corporation’s reserves by 2.8% in 2006, the shareholder’s fund rose to RM2.69 billion from RM2.62 billion as at 31 December 2006.
For further information, please contact:
Siti Badarny Hassan
Manager, PR & Special Programmes
Tel: 03-7806-2300 ext 231
27-Jun-2007 15:26:13 PM