Malaysia’s national mortgage corporation Cagamas announced on November 8 it had successfully raised 2.2 billion ringgit (US$503.40 million) in October. This amount comprises 400 million ringgit in five-year Islamic medium-term notes (IMTNs), 100 million ringgit in one-year conventional medium-term notes (CMTNs), 575 million ringgit in Islamic commercial papers (ICPs), and 150 million ringgit in conventional commercial papers (CCPs).
An additional S$305 million (US$231 million)) was issued in one-year Singapore MTNs through Cagamas’ wholly-owned subsidiary, Cagamas Global. This brings the total funds raised by Cagamas in 2024 to 15.2 billion ringgit as of October.
Cagamas president and CEO Kameel Abdul Halim says the successful conclusion of the company’s fund-raising activities in October, despite continued volatility in the local and global fixed income markets, reaffirms its role as a secondary mortgage corporation in providing liquidity to primary lenders of home financing and housing loans.
“Demand for Cagamas' foreign currency bonds remains resilient across diverse investor profiles,” Kameel points out. “The Singapore dollar issuance was fully subscribed by foreign investors, which include asset managers and financial institutions.” He says the latest issuance has brought the cumulative Singapore dollar-denominated issuance for the year to S$525 million.
The Singapore dollar-denominated bonds are fully and unconditionally guaranteed by Cagamas, while the ringgit issuances, which will be redeemed at their full nominal value upon maturity, are unsecured obligations of the company.
In July, Cagamas concluded its first 50 million ringgit three-month social repurchase (social repo) agreement with a local financial institution. It also issued 100 million ringgit of two-year Asean sustainability bond and 290 million ringgit of its three-month and six-month ICPs with Asean social SRI (sustainable and responsible investment) sukuk status, underscoring its commitment to sustainable financing and supporting industry-led sustainability initiatives.
The social repo is a bespoke arrangement for the company whereby the proceeds raised from the transaction will be used to purchase small and medium enterprises (SME) loans, which qualify as eligible assets under the Cagamas sustainability bond/sukuk framework. The transaction represents another step forward in the company’s efforts to anchor industry-led sustainability initiatives within the financial sector.
A social repo provides the financial markets with a viable funding instrument alternative aligned with their sustainability goals. This alternative broadens Cagamas’ sustainability liquidity sources for the financial sector.
