now loading...
Wealth Asia Connect Middle East Treasury & Capital Markets Europe ESG Forum TechTalk
Treasury & Capital Markets
Cagamas further diversifies funding sources
Marks first Australian dollar offering from a Malaysian non-bank issuer
Chito Santiago 19 Oct 2017

MALAYSIA’s national mortgage Corporation Cagamas further diversified its funding sources when it priced its first Australian dollar offering amounting to A$100 million (US$78.75 million). This is actually part of a dual-currency transaction that includes a three-year one-billion-ringgit (US$236.40 million) conventional medium-term note (CMTN).

The one-year Australian dollar deal, announced on October 19, is the first ever Australian dollar offering from a Malaysian non-bank issuer. It was issued through Cagamas’ wholly-owned subsidiary Cagamas Global PLC and represents the company’s first foreign currency floating rate note (FRN) arranged under Cagamas’ US$2.5 billion conventional multi-currency medium-term note programme.

The ringgit tranche was issued under the company’s 40-billion-ringgit medium-term note programme and marks Cagamas’ second dual-tranche re-opening concluded in 2017.

In issuing a foreign currency FRN via a new currency for Cagamas, it was able to reduce its cost of funding. “Cagamas continuously monitors the foreign markets for opportunities to diversify its funding sources,” says the company’s CEO Chung Chee Leong. “The company’s continued engagement with investors has garnered interest from Australian dollar investors, which led to the conclusion of this deal at competitive pricing of 75bp over the corresponding benchmark three-month Australian bank bill swap rate.”

On the local currency front, the CMTN offering represents Cagamas’ fourth re-opening arranged in 2017 – inclusive of the two sukuk that were re-opened in September.

“The re-opening evidenced Cagamas’ continued commitment in promoting secondary liquidity through an increase in the outstanding amount of each stock and further diversification of the existing investor base,” adds Chung. “Despite volatile market conditions with the 10-year tenured US treasury yields rising by 15bp month-on-month, the dual-tranche re-opening was priced competitively.

The latest deal brings the aggregate year-to-date issuance of Cagamas to 10.5 billion ringgit – the highest amount issued by the company for a single year since 2013. Of the total, the foreign currency-denominated bonds/sukuk accounted for 30% at 3.1 billion ringgit equivalent, while the remaining 70% or 7.4 billion ringgit is in local currency.

Cagamas has already accessed the CNH, Hong Kong dollar, US dollar and Singapore dollar markets in its overseas funding forays. In September, it tapped the Singapore dollar bond market for S$200 million (US$147 million), which represents Cagamas’ largest foreign currency deal transacted via private placement.

The one-year conventional medium-term notes offering was priced at 1.52%, or 45bp above the corresponding Singapore offered rate and was subscribed by a diverse range of foreign investors.

Conversation
Stephanie Choi
Stephanie Choi
sustainable and impact investing strategist
UBS Global Wealth Management Chief Investment Office
- JOINED THE EVENT -
4th ESG Summit Webinar Series - Part 1
Paving the way toward net zero
View Highlights
Conversation
Jugeshinder Singh
Jugeshinder Singh
Group CFO
Adani Group
- JOINED THE EVENT -
18th Asia Bond Markets Summit - Europe Edition
Taking advantage of the great bond re-set
View Highlights