CGIF-wrapped bond to spark Asean local currency market

Author: Ashley Lee | Published: 7 May 2013

KEY TAKEAWAYS

· Noble Group’s baht-denominated bond issue is the first fully guaranteed by a wrap from the Credit Guarantee & Investment Facility, an ADB trust supported by Asean+3;

· CGIF was established to deepen the local currency bond market in the Asean+3 jurisdictions;

· Under the guarantee, the acceleration of the bonds is only triggered by non-payment. Other events, such as a technical default, would not trigger the acceleration event;

· Structurally the CGIF resembles a guarantee by a monoline insurance company, but has more flexible criteria.

Noble Group’s baht-denominated bond issue is the first fully guaranteed by a wrap from the Credit Guarantee & Investment Facility (CGIF).

The CGIF, established by the Association of Southeast Asian Nationals (Asean) along with China, Japan, Korea and Asian Development Bank (ADB), is a trust fund of ADB. Its initial authorized capital is $700 million, and it was created to encourage the development of...