Cagamas's Sukuk for affordable housing gets overwhelming response


Cagamas president and CEO Datuk Chung Chee Leong said the SRI Sukuk was subscribed by socially responsible investors and executed at a competitive rate.

KUALA LUMPUR: Cagamas Bhd’s inaugural Asean Sustainability SRI Sukuk, totalling RM450mil for affordable housing, has received overwhelming response.

The National Mortgage Corporation of Malaysia said on Thursday it had successfully priced a combined issuance of its SRI Sukuk and Islamic medium term notes (IMTNs) totalling RM450mil.

The issuance, comprising a three-year RM100mil SRI Sukuk and RM350mil IMTNs will be issued based on the Islamic principle of Murabahah under the company’s existing RM60bil IMTN programme.

The proceeds from the SRI Sukuk will be used to fund the purchase of eligible Islamic financing for affordable housing. The proceeds from the IMTNs will be used to fund Islamic house financing.

Cagamas president and CEO Datuk Chung Chee Leong said the SRI Sukuk was subscribed by socially responsible investors and executed at a competitive rate.

The issuance, conducted via a public book building exercise led solely by RHB Investment Bank, received an overwhelming response from investors and achieved a total order close to RM2bil at initial price guidance.

This enabled the company to progressively improve the price guidance, leveraging on the demand momentum to close at a final price of 2.23% per annum for the SRI Sukuk and 2.25% per annum for the IMTNs, with a combined final book-to-cover ratio of 3.3 times.

The final prices for the issuance represent 39 and 41 basis points above the corresponding three-year Malaysian Government Investment Issue.

Chung said Cagamas was encouraged by the exceptionally strong level of support from investors as evidenced by the lower yield recorded on the SRI Sukuk compared to the IMTNs.

“We had participation from a diversified pool of investors, including a statutory body, sovereign wealth funds, pension funds, financial institutions, asset managers and insurance companies, ” he said.

The SRI Sukuk for affordable housing was assigned the highest Social Benefit rating of Tier 1 by RAM Sustainability Sdn Bhd under Cagamas’ Sustainability bond/Sukuk framework.

The framework comprises two social solutions namely affordable housing and employment generation via small and medium enterprises; and five green solutions which include renewable energy, energy efficiency, green buildings, low-carbon transportation and sustainable water and wastewater management.

The transaction marks Cagamas’ 17th issuance exercise for the year and will bring the year-to-date issuance amount to RM6.68bil.

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

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Business News

Depressed US dollar plumbs lowest levels in nearly 3 months, FOMC minutes awaited
UMW Q3 net profit slips to RM101mil
GDex to expand warehouses, distribution centres and fleet
MPI registers 50% jump in Q1 net profit�
Top Glove sees demand doubling when vaccines ready by year-end
MMC Corp posts lower earnings in Q3�
Higher retail margin lifts AEON earnings in Q3
Prestar’s 3Q net profit jumps 132% to RM5.2mil
Builder IJM sees encouraging outlook after improved Q2 results�
KLCI bounces back, Public Bank, Telekom advance

Stories You'll Enjoy