KUALA LUMPUR (July 29): Malaysia national mortgage corporation Cagamas Bhd announced its inaugural Singapore dollar-denominated issuance under Cagamas US$2.5 billion Conventional Multicurrency Medium Term Notes (MTN) Programme.
In a statement today, Cagamas said the proceeds from the issuance will be used to fund the purchases of loans from the financial system.
The Singapore dollar-denominated paper, with a maturity of three years, is issued through its wholly-owned subsidiary, Cagamas Global PLC and will be fully and unconditionally guaranteed by Cagamas.
“The company’s investor engagements and reverse enquiry initiatives generated interest from a number of SG Dollar investors for its papers and led to the conclusion of this deal at attractive pricing,” its president cum chief executive officer Chung Chee Leong said in the statement.
Carrying an issue rating of A3 by Moody’s Investor Service, the three-year Singapore dollar issuance was closed at a spread of 50 basis points over the corresponding Singapore’s Swap Offer Rates (SOR).
Domestically, Cagamas concluded its RM115 million Conventional MTN which will be issued via its existing RM40 billion Islamic and conventional MTN programmes.
Chung said demand for Cagamas’ papers remained strong as evidenced by a commendable bid-to-cover ratio of 4.2 times, despite market participants remaining on the side lines ahead of the festive break and an announcement of Malaysia’s June Consumer Price Index figure which rose to 2.5% year-on-year against market consensus of 2.4%.
“The one- and three-year conventional MTN was competitively priced with the spread of 53 basis points and 57 basis points respectively above the corresponding Malaysian Government Securities (MGS),” he added
These conventional MTN, which will be redeemed at their full nominal value on maturity, are unsecured obligations of Cagamas, ranking pari passu among themselves and with all other existing unsecured obligations of the company.
Cagamas said they will be listed and tradable under the Scripless Securities Trading System.