Cagamas sets new benchmark with dual tranche reopening


Cagamas Berhad recently announced its fourteenth issuance for the year. The 3-year, RM1.0 billion Cagamas Islamic Medium Term Notes (IMTN) represents the Company and the country’s first ever dual tranche Sukuk reopening.

Proceeds from the issuance will be used to fund the purchase of Islamic house financing from the financial system.

“Despite being only a half-day offering, the order book received overwhelming response which allowed the Company to successfully tighten the yield to 3.98% and upsize the issuance from an initial size of RM800 million to RM1.0 billion; this demonstrated the strength and resilience of the domestic market. The final yield was priced competitively at a spread of 50 bps over the 3-year Government Investment Issue (GII),” said Chief Executive Officer, Datuk Chung Chee Leong.

“The successful conclusion of this dual tranche reopening signifies the Company’s continued innovation within the local fixed income market and on-going strategic initiatives to promote secondary liquidity. As at 8 September 2017, Cagamas’ secondary trading volume stood at over RM5 billion. Subscription from foreign-based investors which represented 6% of the total issue size indicates continued confidence in the Company’s name amidst a volatile market backdrop,” added Datuk Chung.

The new issuance will bring the Company’s aggregate issuance for the year to RM8.5 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 all other existing unsecured obligations of the Company.