Cagamas issues Malaysia’s first ASEAN Sustainability SRI Sukuk for affordable housing
Cagamas / MZUKRI

by BERNAMA / graphic by MZUKRI MOHAMAD

CAGAMAS Bhd, the National Mortgage Corporation of Malaysia,  has announced the combined issuance of its inaugural ASEAN Sustainability SRI Sukuk (SRI Sukuk) and Islamic Medium Term Notes (IMTNs) totalling RM450 million, issued under its existing RM60 billion Islamic Medium Term Notes Programme.

President and chief executive officer Datuk Chung Chee Leong said the issuance, comprising a three-year RM100 million SRI Sukuk and RM350 million IMTNs, was issued under the Islamic principle of Murabahah.

“The proceeds from the SRI Sukuk will be used to fund the purchase of eligible Islamic financing for affordable housing, whilst the proceeds from the IMTNs will be used to fund Islamic house financing,” he said in a statement today.

Chung said the issuance, conducted via a public book building exercise, which was led solely by RHB Investment Bank, received an overwhelming response from investors and achieved a total order close to RM2 billion at initial price guidance.

“This enabled the company to progressively improve the price guidance, leveraging the demand momentum to close at a final price of 2.23 per cent per annum (p.a.) for the SRI Sukuk and 2.25 per cent p.a. for the IMTNs with a combined final book-to-cover (BTC) ratio of 3.5 times.

“The final prices for the issuance represent 39 to 41 basis points above the corresponding three-year Malaysian Government Investment Issue (MGII),” he said.

Furthermore, 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).

“The Framework comprises two social solutions, namely affordable housing and employment generation via SME; and five green solutions which includes renewable energy, energy efficiency, green buildings, low-carbon transportation, sustainable water and wastewater management,” he said.

Meanwhile, Chung said the transaction marked the company’s 17th issuance exercise for the year and brings the year-to-date issuance amount to RM6.68 billion.

“The papers, which will be redeemed at their full nominal value upon maturity, are unsecured obligations of the company, ranking pari passu and with all other existing unsecured obligations of the company. They will be listed and tradable under the Scripless Securities Trading System,” he added.