Cagamas concludes RM800 mln combined issuance prior to Budget 2020 announcement

KUALA LUMPUR, Oct 18 -- Cagamas Bhd today announced the issuance of its multi-tenured RM500 million Islamic Medium Term Notes (IMTN), multi-tenured RM100 million Conventional Medium Term Notes (CMTN) and RM200 million three-month Conventional Commercial Papers (CCP).

The issuances represent its 19th and 20th issuance exercise for the year of which proceeds will be used to fund the purchase of mortgages and Islamic home financings from the financial system.

 In a statement here, president and chief executive officer Datuk Chung Chee Leong said the pricing of the IMTN and CMTN was concluded a day prior to Malaysia’s Budget 2020 announcement on Oct 11.

“The IMTN and CMTN were successfully priced despite subdued market conditions as investors opted for a wait-and-see approach ahead of the budget announcement.

“This was evidenced by the soft interest gathered from the re-opening tender of the 10-year Malaysian Government Securities on Oct 9 that was priced with a mere 1.233 times book-to-cover (BTC) ratio,” he said.

Chung pointed out that the IMTN and CMTN pricing exercise was well received by investors, in particular the three-year IMTN which obtained overwhelming response with a BTC ratio of 2.9 times.

This enabled Cagamas to price the IMTN on the lower end of the price guidance of 3.45 per cent to 3.50 per cent.

The company managed to conclude final pricing ahead of its ‘AAA’ rated counterpart, which also tapped the market on the same day.

It also successfully secured competitive pricing for the three-month CCP, referenced at five basis points below the three-month onshore Kuala Lumpur Interbank Offered Rate.

The conclusion of the deals bring Cagamas’ year-to-date issuance to RM6.7 billion.

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




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