CAGAMAS raises RM1b from 1-year floating bonds and sukuk

by TMR / pic by TMR FILE

CAGAMAS Bhd successfully sold RM1.03 billion worth of debt amid rising interest rates.

The national mortgage corporation of Malaysia raised RM345 million via one-year Floating Profit Rate Islamic medium term notes (IMTNs) and RM680 million one-year Floating Rate Conventional medium term notes (CMTNs). 

The proceeds from the IMTNs and CMTNs will be used to fund the purchase of house financing and housing loans from the financial system, Cagamas stated that in a release today.

It added that despite the challenging market environment and removal of policy accommodation, liquidity in the local fixed income market remains stable and resilient. 

“The IMTNs and CMTNs represent the first issuance concluded by the company post Overnight Policy Rate hike of a quarter basis point by Bank Negara Malaysia,” said president/CEO Datuk Chung Chee Leong (picture).

The IMTNs and CMTNs, with its floating rate mechanism, provide potentially higher returns to investors amid a rising interest rate environment.

The deals were successfully priced with three-month Kuala Lumpur Interbank Offered Rate (Klibor) reference at equivalent to 2.66% based on Klibor fixing on the pricing date. The issuance brings Cagamas’ aggregate issuances for the year to RM7.19 billion.

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

Since incorporation in 1986, Cagamas has cumulatively issued circa RM365.9 billion worth of corporate bonds and sukuk.