Islamic Finance

Malaysia: Cagamas announces issuance of Rm825 million bond and RM800 mil sukuk

| 08 August, 2018
 NST Business
Malaysia: Cagamas announces issuance of Rm825 million bond and RM800 mil sukuk
Cagamas logo seen on wall. Source: New Straits Times

AUGUST 8, 2018 | 5:13PM MYT | KUALA LUMPUR

National mortgage company Cagamas Bhd has issued an RM825 million bond and sukuk to fund the purchase of mortgage loans and Islamic house financing from the financial system

The RM825 million one-year bond and sukuk comprises RM800 million conventional medium term notes (CMTN) and RM25 million Islamic medium term notes (IMTN).

In a statement today, Cagamas president and chief executive officer Datuk Chung Chee Leong said the RM800 CMTN was concluded via reopening of an existing bond tranche, marking the company’s second reopening exercise for the year.

“The outstanding bond has a remaining maturity of one year and an outstanding amount of RM200 million which was successfully upsized to RM1.0 billion post the reopening exercise.

“The issuance was well received by a diverse range of local investors including sovereign wealth funds, financial institutions, corporates, insurance companies and foreign asset managers,” he added.

Chung said the overwhelming response for the issuances enabled the company to upsize the initial reopening amount from RM500 million to a final RM800 million.

Thus, he said it enabled the company to tighten the pricing by two basis points to a final yield of 3.95 per cent, representing a spread of 56 basis points above the corresponding one year Malaysian government securities.

The RM25 million one-year IMTN was also competitively priced at 3.95 per cent and concluded via private placement, said Chung.

The pricing of its one-year ringgit denominated bonds and sukuk represented the company’s 16th issuance exercise for the year, after a series of successful foreign currency denominated bond issuances by the company.

This brings the aggregate primary issuance to RM9.3 billion for 2018, marking a 24 per cent increase in the company’s primary supply as compared to 2017’s year-to-date total of RM7.5 billion.

The CMTN and IMTN, which will be redeemed at their full nominal value on maturity, are unsecured obligations of the company, ranking pari passu among themselves and with all other existing unsecured obligations of the company.

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