Cagamas issues RM605m commercial papers


KUALA LUMPUR (May 23): National mortgage corporation Cagamas Bhd has issued commercial papers worth RM605 million to fund the purchase of housing loans and Islamic home financing from the domestic financial system.

The commercial papers, comprising RM300 million three-month conventional commercial papers (CCPs) and RM305 million three-month Islamic commercial papers (ICPs), are the first issuance concluded by Cagamas after Bank Negara Malaysia cut the overnight policy rate (OPR) by 25-basis-point on May 7, 2019.

President and chief executive officer Datuk Chung Chee Leong said both the conventional and Islamic issuances were priced competitively via public offerings at two basis points below the three-month onshore benchmark Kuala Lumpur Interbank Offered Rate, or equivalent to an effective yield of 3.44 per cent per annum based on the pricing date.

"Despite heightened volatility in the global bond markets and moderation in growth forecasts, liquidity in the local bond markets remains resilient, with the short-term papers receiving strong subscription rates as demonstrated by the bid-to-cover ratio of 3.6 times collectively," he said.

The papers, which will be redeemed at their full nominal value upon maturity, are unsecured obligations of Cagamas, ranking pari passu among themselves and with all other existing unsecured obligations of the company.

Cagamas said the ICPs would be issued under the Islamic Commodity Murabahah structure.


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