MARC views the acquisition of Danajamin Nasional Berhad (Danajamin) by Bank Pembangunan Malaysia Berhad (Bank Pembangunan) does not have immediate rating implications on both entities. The rating agency currently rates both entities at AAA with a stable outlook. 
 
Bank Pembangunan will acquire 50% of Danajamin's shares from Credit Guarantee Corporation Malaysia Berhad (CGC) and the remaining 50% from Minister of Finance (Incorporated) (MoF Inc). The acquisition will be funded by cash to CGC and new issuance of shares in Bank Pembangunan to MoF. As a result of the acquisition exercise that is expected to be completed by end-November 2021, Danajamin will become a wholly-owned subsidiary of Bank Pembangunan. 

The acquisition is the first phase under the government's plan to consolidate development financial institutions (DFI) in the country. MARC regards the consolidation of DFIs will align mandates, create synergies and improve efficiencies in the DFI space. The current rating on Bank Pembangunan reflects its status as an MoF Inc-owned entity mandated to provide financing to key sectors in line with the government's development goals. The bank is also strengthening its position in the sustainability financing space in sync with the government's agenda. 

Danajamin's status as the sole government-owned financial guarantee insurer to facilitate businesses in accessing the capital market remains a key rating consideration. Post-acquisition, MARC does not envisage any immediate dilution in their mandated roles and government support. 

MARC's full ratings on Bank Pembangunan and Danajamin are as follows:
Entity	                Type of rating	                        Rating	        Outlook
Bank Pembangunan	Financial Institution	                AAA	        Stable
	                RM5.0 billion Islamic Medium-Term Notes	AAAIS	        Stable
Danajamin	        Insurer Financial Strength	        AAA	        Stable
	                Counterparty Credit