Kuala Lumpur, 30 July 2024 – Cagamas Berhad (“Cagamas” or “the Company”), the National Mortgage Corporation of Malaysia, has concluded its first RM50 million 3-month Social Repurchase Agreement (“Social Repo”) with a local financial institution and the issuance of a RM100 million 2-year ASEAN Sustainability Bond and RM290 million of its 3-month and 6-month Islamic Commercial Papers (“ICPs”) with ASEAN Social SRI Sukuk status, underscoring its commitment to sustainable financing and supporting industry-led sustainability initiatives.
The Social Repo1 is a bespoke arrangement for the Company whereby proceeds raised from the transaction will be used to purchase Small Medium Enterprises (“SME”) loans which qualifies as eligible assets under the Cagamas Sustainability Bond/ Sukuk Framework. The transaction represents another step forward in the Company’s efforts to anchor industry-led sustainability initiatives within the financial sector. A Social Repo provides the financial markets with a viable funding instrument alternative aligned with their sustainability goals. This alternative broadens the Company’s sustainability liquidity sources for the financial sector.
Meanwhile, the issuance of RM145 million each for the 3-month and 6-month ASEAN Social SRI Sukuk was the Company’s first short-term Islamic debt securities offering that carries the “social” label, encompassing its deep commitment to providing socially responsible investment opportunities. Cagamas had previously issued social sukuk of more than one year under its Islamic Medium Term Note programme. Proceeds from the issuances will be used to fund the purchase of affordable housing financing from the financial system.
Commenting on these latest developments, President/Chief Executive Officer of Cagamas, Kameel Abdul Halim said, "These transactions underscore our on-going efforts to foster a sustainable and inclusive financial ecosystem. The Social Repo for SMEs which is a first of its kind for Cagamas, and the ASEAN Social SRI Sukuk for affordable housing are critical steps in our journey to drive meaningful social change through innovative financial solutions.”
“Cagamas remains committed to advancing and leveraging financial instruments to promote sustainable and affordable housing financing. These transactions mark significant milestones in our broader strategy to integrate sustainability into our core business offerings," he further adds.
To date, the Company has raised RM10 billion through the issuance of bonds and sukuk and other funding sources. The papers will be redeemed at their full nominal value upon maturity, are unsecured obligations of the Company, ranking pari passu with all other existing unsecured obligations of the Company.
1Repurchase Agreement (REPO) - A Repo transaction is where securities are sold against cash with a commitment to repurchase the equivalent securities on a specified date at a specified price, where both date and price are fixed at the initiation of the transaction. The REPO seller delivers the securities and receives cash from the REPO buyer.