Kuala Lumpur – Cagamas Berhad (“Cagamas” or “the Company”), the National Mortgage Corporation of Malaysia, has concluded issuance of RM1.085 billion worth of bonds and sukuk, comprising RM735 million 1-year Islamic Medium Term Notes (IMTNs), RM200 million 3-year IMTNs and RM150 million 5-year Conventional Medium Term Notes (CMTNs). Proceeds from the issuance will be used to fund the purchase of housing loans and house financing from the domestic financial system.
Cagamas President/ Chief Executive Officer, Datuk Chung Chee Leong said, “We are pleased with the successful conclusion of the IMTNs and CMTNs issuances despite cautious market sentiment in view of the lingering domestic political landscape prior and after the 15th Malaysian general election. The issuances were reasonably priced above the corresponding Malaysian Government Securities and Malaysian Government Instrument Issue.”
This brings the Company’s year-to-date issuances from both domestic and international markets to RM19.17 billion. Cagamas is on track to achieve at least RM20 billion issuance of bonds and sukuk this year.
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.
Cagamas Berhad (Cagamas), the National Mortgage Corporation of Malaysia, was established in 1986 to promote the broader spread of home ownership and growth of the secondary mortgage market in Malaysia. It issues bonds and sukuk to finance the purchase of housing loans from financial institutions and non-financial institutions. The provision of liquidity to financial institutions at a reasonable cost to the primary lenders of housing loans encourages further expansion of financing for houses at an affordable cost.
The Cagamas model is well regarded by the World Bank as the most successful secondary mortgage liquidity facility. Cagamas is the second largest issuer of debt instruments after the Government of Malaysia and the largest issuer of AAA corporate bonds and sukuk in the market. Since incorporation in 1986, Cagamas has cumulatively issued circa RM388.1 billion worth of corporate bonds and Sukuk.
Cagamas’ bonds and sukuk continue to be assigned the highest ratings of AAA/Stable/P1 by RAM Rating Services Berhad and AAA/MARC-1 and AAAIS/MARC-1IS by Malaysian Rating Corporation Berhad, denoting its strong credit quality. Cagamas is also well regarded internationally and has been assigned local and foreign currency long-term issuer ratings of A3 by Moody’s Investors Service Inc. that are in line with Malaysian sovereign ratings.
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