KUALA LUMPUR (April 7): Cagamas Bhd has announced its pricing of RM1 billion five-year Conventional Medium Term Notes (CMTNs) to fund the purchase of housing loans from the domestic financial system.

In a statement, the national mortgage corporation said the transaction represents the largest five-year CMTNs issuance by the company since December 2017. 

The successful conclusion of the five-year CMTNs reflects resilience against a choppy market backdrop due to further upward pressure in the domestic bond yields, said Cagamas president and CEO Datuk Chung Chee Leong.

“This mirrors global bond movements as more countries progressively transition towards endemic management of Covid-19.

“The CMTNs, priced via private placement, were successfully priced with a spread of 22 basis points above the corresponding Malaysian Government Securities. 

“The new issuance brings the company’s aggregate issuances for the year to RM5.3 billion,” added Chung.

Cagamas said the papers will be redeemed at their full nominal value upon maturity. They are unsecured obligations of the company, ranking pari passu with all other existing unsecured obligations of Cagamas.

Cagamas is the second largest issuer of debt instruments after the government and the largest issuer of AAA corporate bonds and sukuk in the market.

Cagamas’ corporate bonds and sukuk continue to be assigned the highest ratings of AAA/Stable/P1 by RAM Rating Services Bhd and AAA/MARC-1 and AAAIS/MARC-1IS by Malaysian Rating Corporation Bhd, denoting its strong credit quality. 

Cagamas has also 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.