Japan funds rated a boon for cash-strapped Malaysia
Japan funds rated a boon for cash-strapped Malaysia
KUALA LUMPUR (Reuters): A Japanese-government guaranteed 66.6
billion euroyen (US$570 million) note issue for Malaysia was a
boon for the cash-strapped nation as it tried to revive its
recessionary economy, economists said on Thursday.
They said the issue could be the start of Malaysia's slow
return to the international financial system, after it isolated
itself in September by introducing capital controls.
"It is good news all around. They can use this money as part
of their bank recapitalization plan," said Neil Saker, head of
regional economic research at SG Securities in Singapore.
Japan's Nomura Securities said in Tokyo that Kris (Cayman
Island) One Ltd on Thursday launched the euroyen notes due
January 13, 2004, carrying a coupon rate of 1.5 percent and
priced at par.
The notes will help Malaysia get funds from a $30 billion
Japanese government aid package for Asia, called the New Miyazawa
Initiative, that was announced in October.
Japan's Ministry of International Trade and Industry will
guarantee Malaysia's payment of the loan.
Economists said the funds were being raised at standard terms
for a euroyen issue, something Malaysia with its junk status
rating from most international credit rating firms would not be
able to get.
Japan has promised aid to Malaysia both bilaterally as well as
part of the Miyazawa initiative.
"We are close to finalizing negotiations by the end of the
year," Masaki Okada, Foreign Ministry deputy press secretary,
told reporters in Kuala Lumpur.
Japan has promised some $2.6 billion in aid to Malaysia. This
includes a direct $1.8 billion loan Malaysia has requested from
the government of Japan.
Under the $30 billion aid plan unveiled in October by Finance
Minister Kiichi Miyazawa, the Export-Import Bank of Japan (EXIM)
bank will guarantee borrowing or debt issuance by South Korea,
Malaysia, the Philippines, Singapore, Thailand and Indonesia. The
bank could also purchase sovereign debt issued by them.