Kuala Lumpur, 20 July 2020 – Cagamas Berhad (“Cagamas” or “the Company”), the National Mortgage Corporation of Malaysia, announced its issuance of RM300 million 3-month Conventional Commercial Papers (CCPs). Proceeds from the issuance will be used to fund the purchase of housing loans from the financial system.
“Earlier this month, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to reduce the Overnight Policy Rate (OPR) by 25 basis points to 1.75 percent, the fourth cut since the beginning of the year, resulted in an overall drop in yields in the debt capital market. The positive momentum in the market allows for the Company to take advantage of the current low interest rate environment for funding, hence continuing to provide competitive funding to primary lenders of housing loans,” said Datuk Chung Chee Leong.
“The successful conclusion of the CCPs were evidenced by the continued demand for the Company’s papers as investors prefer to stay invested in the short and medium term.
The CCPs were competitively priced at the corresponding 3-month KLIBOR benchmark rate or equivalent to 2.03% based on KLIBOR fixing on the pricing date. The pricing of the CCPs also represented 23 bps over Malaysian Treasury Bills and 4 bps above corresponding government guaranteed papers,” added Datuk Chung.
The transaction marked the Company’s ninth issuance exercise for the year and brings the year-to-date (YTD) issuance amount to RM4.11 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. They will be listed and tradable under the Scripless Securities Trading System.