Cagamas concludes RM1b issuance of debt notes

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KUALA LUMPUR (July 18): Cagamas Bhd has announced the conclusion of combined bonds and notes issuances, totalling RM1 billion, whereby proceeds will be used to fund the purchase of housing loans from the financial system.

This comprises RM700 million one-year fixed rate conventional medium term notes (CMTN), RM200 million three-month conventional commercial papers (CCP), and RM100 million one-year floating rate conventional medium term notes (FRN), the mortgage corporation said in a statement. 

According to Cagamas, the RM700 million one-year CMTN issuance was concluded via reopening of an existing bond tranche which marked the company’s first reopening exercise for the year. The outstanding bond of RM50 million, with a remaining maturity of one year, was upsized to RM750 million post-reopening exercise. 

“The conclusion of the deal represents part of the company’s ongoing initiatives and continued commitment in promoting secondary liquidity for its outstanding local currency bonds and sukuk in the domestic market,” said president cum chief executive officer Datuk Chung Chee Leong in the statement. 

Meanwhile, the RM200 million three-month CCP was concluded via a public offering, which Chung said recorded a commendable bid-to-cover ratio of 2.6 times and competitively priced at 10 basis points, below the corresponding three-month Kuala Lumpur Interbank Offer Rate (KLIBOR). 

“In addition, the RM100 million one-year FRN was priced at par with the three-month KLIBOR and represents the company’s first FRN issued for the year.  

“The concluded FRN also marked the first floating rate note issuance within the domestic AAA rated segment and further underscores the company’s ability in diversifying its funding options to a wider pool of investors,” Chung added. 

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

Since its incorporation in 1986, Cagamas has cumulatively issued about RM321.3 billion worth of corporate bonds and sukuk.