Malaysian stock exchange Bursa Malaysia Berhad and credit ratings firm RAM Holdings Berhad have entered into a shareholders’ agreement on Thursday to develop a new debt fundraising platform.
The platform will facilitate listed and unlisted small to mid-sized companies tapping into a new pool of capital outside of traditional wholesale markets, offering a new avenue and greater flexibility to these companies looking to raise funds, both parties said in a statement.
According to the statement, the platform provides for a ‘bond-like’ experience allowing investors to invest in investment notes with credit and environmental, social, and governance (ESG) ratings as easily as they would invest in shares in a transparent and regulated market, facilitating informed investment decisions.
Under the agreement, the joint venture will be carried out through a new company whereby Bursa Malaysia will hold a 51 percent equity interest and RAM will hold the remaining 49 percent.
“This agreement marks a significant milestone in our journey to become a multi-asset exchange,” said Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.
According to him, the collaboration with RAM will broaden fund raising avenues for both public limited companies (PLCs) and unlisted entities – specifically enabling better access to both conventional and Shariah investment notes.
“At the same time, we would also be able to provide new fixed income investment opportunities to both retail and sophisticated investors,
“This will further create an alternative fund-raising avenue for businesses which are currently underserved in this challenging environment and that are not yet ready to list on the exchange,” he added.
RAM Group Chief Executive Officer and Executive Director Chris Lee said to enhance transparency in the ecosystem of debt-based financing and investments, RAM will contribute its expertise in credit ratings, ESG ratings and fixed income pricing.
Bursa Malaysia is an exchange holding company incorporated in 1976 and listed in 2005, and has grown to be one of the largest bourses in ASEAN today.
The firm operates and regulates a fully-integrated exchange offering a comprehensive range of exchange-related facilities, and is committed to creating opportunities, growing value.
RAM is a provider of independent credit ratings, research, training, risk analysis, ESG analytics and bond pricing.
Formerly known as Rating Agency Malaysia Berhad, RAM was established in November 1990 as a catalyst for the domestic debt capital market and as the nation’s first credit rating agency.
In 2007, its rating operations were novated to a newly formed subsidiary, RAM Rating Services Berhad.
Apart from credit ratings, the RAM Group also offers myriad solutions ranging from economic and debt market research, data & analytics and sustainability services.
In 2016, RAM Sustainability commenced offering Sustainability Ratings, a tool and framework that measure companies’ environmental, social and governance (ESG) performance.
Bond Pricing Agency Malaysia Sdn Bhd (BPAM) became a wholly owned subsidiary of RAM on June 30, 2021.
The company is the sole provider of bond-pricing and valuation data on the Malaysian bond market and is regulated by the Securities Commission Malaysia.