Cagamas commences 2018 debt issuance

Cagamas prices 450-million-ringgit (US$114.20) three-tranche conventional medium-term notes programme

MALAYSIA’s national mortgage corporation, Cagamas, commenced its issuance activity in 2018 as it announced on January 19 the pricing of a 450-million-ringgit (US$114.20 million) three-tranche conventional medium-term notes programme. Proceeds from the offering will be used to fund the purchase of loan receivables from the financial system.

The transaction comprised a 230-million-ringgit tranche with a tenor of one year, a 100-million-ringgit tranche for two years, and a 120-million-ringgit tranche for three years. The pricing for the one-year and three-year notes was tightened from the initial guidance on the back of strong demand, according to Cagamas CEO Chung Chee Leong.

The transaction, concluded via a public offering, represented Malaysia’s first AAA-rated issuance in 2018 and was executed in a half-day book building exercise. It achieved a book-to-cover ratio of over 2x, with subscription from a diverse range of investors, including sovereign wealth funds, pension funds, financial institutions and insurance companies.

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

Cagamas’ inaugural deal in 2018 came after the company recorded robust issuance activity in 2017 during which it raised, inclusive of foreign currency offerings, 15.3 billion ringgit equivalent. This was more than double the amount it raised in 2016 and exceeded its 2017 target of 11 billion ringgit.

Last year also demonstrated the continuing diversification of Cagamas in its funding sources and investor base. In October, it announced its inaugural Australian dollar deal amounting to A$100 million (US$80 million) for one year, which also represented its first foreign currency floating rate note issued under the Cagamas US$2.5 billion conventional multi-currency medium-term note programme. The offering was also the first ever Australian dollar deal from a Malaysian non-bank issuer.

In September, Cagamas announced its one-year S$200 million (US$151.50 million) conventional medium-term notes programme – its largest foreign currency deal transacted via private placement.

Cagamas also accessed the US dollar bond market in 2017 as it announced in April a US$350 million issue for three years, which attracted investors from Luxembourg, UK, Switzerland, United Arab Emirates and Asia.



19 Jan 2018


Capital Markets

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