The Credit Guarantee and Investment Facility (CGIF)* announced it has executed its inaugural reinsurance treaty, with a panel of market leading private reinsurers, led by the specialist credit reinsurance team of Munich Re. This treaty, which began on Oct. 1, 2016, covers all guarantees issued up to the end of 2017.
Under this treaty, Manila, Philippines-based CGIF has reinsured a portion of its guarantee portfolio allowing CGIF to issue more guarantees, thereby enhancing its ability to perform its unique catalytic role for the development of ASEAN local currency bond markets.
“The successful inception of this treaty demonstrates the attractiveness of CGIF’s guarantee portfolio to private reinsurers,” said Kiyoshi Nishimura, CEO of CGIF.
“It also validates the strength of CGIF’s guarantee operations in terms of its selection, assessment and monitoring of the region’s local currency corporate bond exposures,” he added.
Thomas Lallinger, Munich Re’s head of Financial Risk Division, said: “We do very much appreciate closely supporting CGIF as it is a very professional trust fund of [the Asian Development Bank] with the special mandate to develop local Asian bond markets. This perfectly goes along with Munich Re’s strategic ambition to further expand business opportunities in the Asian region.”
“This innovative reinsurance treaty was brokered by Guy Carpenter and heralds a new beginning for specialty reinsurance in Asia,” CGIF said in a statement.
“We are truly proud and privileged to have worked with CGIF to help deliver a unique solution that brings together different areas of the financial sector for the benefit of the Asian community,” said Peter Hearn, president and CEO of Guy Carpenter.
This treaty “serves as a strong endorsement of CGIF as a growing multilateral regional bond guarantor with less than five years of operations,” said the CGIF. “Ultimately, CGIF’s success will inspire investors to appreciate ASEAN local currency bonds as a viable asset class, one of the cornerstones of CGIF’s establishment,” it continued.
CGIF said its reinsurance partners are among the world’s largest and most reputable, with ratings ranging from S&P “AA-” to “A.”
*Credit Guarantee and Investment Facility (CGIF) was established in 2010 by the 10 members of the Association of Southeast Asian Nations (ASEAN) together with the People’s Republic of China, Japan, Republic of Korea (ASEAN+3) and Asian Development Bank (ADB).
Source: Credit Guarantee and Investment Facility