EXIM BANK ENHANCED ITS OVERSEAS GUARANTEE FACILITY

KUALA LUMPUR, June 3, 2009: Export-Import Bank of Malaysia (EXIM Bank), the Malaysian Government Export Credit Agency, announced today that effective 12 May 2009, all Locally Incorporated Foreign Banks (LIFBs) and public listed companies (including their subsidiaries) are allowed to participate in EXIM Overseas Guarantee Facility (EOGF) scheme.

EOGF is one of the facilities under EXIM Bank’s Government Initiated Schemes, introduced in 2006 with RM1 billion of initial funding, aims to assist commercial banks to undertake direct cross-border lending activities. EOGF mitigates overseas financing risks borne by domestic banks, particularly in relation to contractors’ non-performance and non-payment by foreign contract awarders.

Prior to this, participation in the scheme was restricted to local banks and all Malaysian owned or controlled companies, except for Government Linked Companies (GLCs) and Public Listed Companies (PLCs) and their subsidiaries. However, with approval from the Minister of Finance on 12 May 2009, this scheme is now opened to all Locally Incorporated Foreign Banks (LIFBs) and Public Listed Companies (PLCs) and their subsidiaries.

“This enhancement is timely as to ensure local companies involved in overseas businesses including those in the fields of infrastructure, construction and Information, Communication and Technology (ICT) sectors get a fair share of funding and access to lines of credit from domestic financial institutions, especially during this economic downturn”, said Mohd Fauzi Rahmat, EXIM Bank Managing Director and Chief Executive Officer.

He added that participation by Malaysian owned or controlled PLCs and their subsidiaries are also allowed up to 31st December 2010. This enhanced facility however, is still not applicable to GLCs, their subsidiaries & trading companies.

With EOGF, participating FIs are able to provide financing up to 90% of the contract value in major currencies for a tenor not exceeding 10 years. The EOGF scheme ensures that most of commercial banks’ risk exposures for overseas financing are mitigated. This is also part of Government of Malaysia and EXIM Bank’s efforts to stimulate export-oriented investments and activities.

The EOGF offers attractive financing costs and guarantee fees to borrowers. In addition, for an additional premium, borrowers are also able to insure non-payment risks arising from political and commercial losses. The liberalised EOGF is expected to provide the much needed impetus to Malaysian contractors and service providers in their search for financing to support their overseas projects.

Further information on EOGF is available at www.exim.com.my