ADB and ASEAN +3 Forms Insurance Agency Loan of U.S. $ 700 Million

Asian Development Bank (ADB) and ASEAN countries plus China, Japan and South Korea, known as ASEAN +3 agreed to establish a credit guarantee facility worth U.S. $ 700 Million.
Of the total credit guarantee facility, the ADB will support the U.S. $ 130 million, while U.S. $ 570 million supported the ASEAN +3 countries. Of the total of which supported the ASEAN +3, the details are China contributes U.S. $ 200 million, Japan U.S. $ 200 million, U.S. $ 100 Million South Korea and ASEAN U.S. $ 70 million.
ADB's Board of Directors has approved ADB's contribution to Credit and Investment Guarantee Facility (CGIF method). The plan, CGIF trial will commence operations in 2011.
CGIF will provide guarantees for securities denominated in local currency issued by companies in ASEAN. The existence of this guarantee will make firms more easily publish local securities with a longer term.
"CGIF will allow the companies to publish the letter of the value in the domestic market and neighboring markets as well as across the ASEAN +3," says Noy Siackhachanh, adviser to the ADB for regional economic cooperation in a press release, Wednesday (14/4/2010).

Local securities markets in developing countries of East Asia region has experienced a dramatic expansion in recent years to U.S. $ 4.4 trillion in 2009. But that number is low ie only 7% of the total global securities. While corporate bonds only about 30% of the total local papers in this area.
CGIF will later be overseen by representatives from 8 countries, and 1 representative of ADB. Location CGIF placements it is not certain. Once CGIF funds were utilized, the board will review the role CGIF, organizational structure and operations in order to decide whether capital or leverage ratio of 1:1 should be improved.

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