Kuala Lumpur, March 6, 2024 -- Cagamas Berhad (“Cagamas” or “the Company”), the National Mortgage Corporation of Malaysia, announced the successful conclusion of RM960 million worth of bonds and sukuk comprising RM460 million 1-year Conventional Medium Term Notes, RM200 million 2-year CMTNs and RM300 million Islamic Medium Term Notes (IMTNs).
President/ Chief Executive Officer of Cagamas, Kameel Abdul Halim said, “The Company successfully issued RM960 million worth of bonds and sukuk through its first public book building exercise this year.”
At a glance
- Company
- Cagamas Berhad
- Announcement
- Financing
- Location
- Kuala Lumpur
Key figures
- Total bonds and sukuk issued
- RM960 million
- 1-year Conventional Medium Term Notes
- RM460 million
- 2-year CMTNs
- RM200 million
- Islamic Medium Term Notes
- RM300 million
- Order book oversubscription
- 2.3 times
- Aggregate funds raised for the year
- RM2.08 billion
People
- Kameel Abdul HalimPresident/ Chief Executive Officer
Products and programs
“The order book received overwhelming response, oversubscribed by 2.3 times which attracted subscription from a diverse pool of investors including financial institutions, pension funds, insurance companies, foreign investors and asset managers. This allowed the Company to successfully tighten the yield by 5 basis points (bps) from the initial price guidance. The bonds and sukuk were priced competitively at a spread of 35 bps over the Malaysian Government Securities. This demonstrated the strength and resilience of the domestic fixed income market. Proceeds raised from the issuances will be used to fund the purchase of Islamic home financings and housing loans from the domestic financial system, reflecting continued provision of liquidity by Cagamas to the domestic banking system,” said Kameel.
The new issuance will bring the Company’s aggregate funds raised for the year to RM2.08 billion. The papers will be redeemed at their full nominal value upon maturity, are unsecured obligations of the Company, ranking pari passu with all other existing unsecured obligations of the Company.
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Questions around this news
What securities did Cagamas issue in March 2024?
The issuance totaled RM960 million and included RM460 million of 1-year Conventional Medium Term Notes, RM200 million of 2-year Conventional Medium Term Notes, and RM300 million of Islamic Medium Term Notes. The company said this was its first public book-building exercise of the year.
How will Cagamas use the proceeds from the issuance?
Cagamas said it would use the proceeds to purchase Islamic home financings and housing loans from Malaysia’s domestic financial system. The release describes these purchases as part of the company’s role in providing liquidity to the domestic banking system.
What does it mean that the securities are unsecured and rank pari passu?
The release says the securities are unsecured obligations and rank pari passu with the company’s other existing unsecured obligations. In general, unsecured debt is not backed by specific collateral, while pari passu means obligations have equal ranking relative to one another, subject to applicable law and the terms of the debt.
