Cagamas, the National Mortgage Corporation of Malaysia, has issued a RM90 million (US$19 million) SRI Sukuk facility on the 29th September 2023 as part of a larger sustainability capital markets exercise. The facility constitutes the inaugural issuance of ASEAN green bonds and SRI Sukuk for the purchase of a green housing financing portfolio.
The issuance funded the purchase of RM300 million (US$63.33 million)-worth of green housing loans and financing transactions from Hong Leong Bank and Hong Leong Islamic Bank.
The Sukuk facility was issued under Cagamas’s RM60 billion (US$12.67 million) Sukuk program which accommodates the issuance of SRI-labeled Islamic facilities.
In addition to the RM90 million Sukuk, the issuance includes a RM210 million (US$44.33 million) conventional green bond tranche to finance the conventional loan portion of the green housing portfolio.
“The purchase of these green assets not only contributes positively to our environment but also fortifies our essential role in the facilitation of liquidity within a developing green capital market,” Kameel Abdul Halim, the president and CEO of Cagamas, commented.
Underlying its intermediary efforts in the secondary market, Kameel notes that the collaboration with Hong Leong Bank is part of its agenda to support industry-led green initiatives.
According to Kevin Lam, the group managing director and CEO of Hong Leong Bank, the bank is looking to expand its collaboration with Cagamas to include other types of financings from the group.
Notably, Cagamas has collaborated with Hong Leong Bank in 2021 for the issuance of a RM300 million ASEAN Sustainability Bond to fund the purchase of affordable housing loans.
With the close of the inaugural green housing portfolio SRI Sukuk, Kameel noted that Cagamas is looking to engage in similar industry collaborations to enhance accessibility to affordable green housing and strengthen the green finance ecosystem.
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Cagamas’ Inaugural Green Housing SRI Sukuk RM90 million (US$19 million)  29th September 2023 |
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| Summary of terms and conditions | |
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Issuer |
Cagamas |
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Size of issue |
RM90 million (US$19 million) |
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Mode of issue |
Private placement, bookbuilding, bought deal
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Purpose |
To fund the purchase of a green home financing portfolio |
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Tenor |
One-year |
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Profit rate |
3.67% |
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Payment |
Semi-annual |
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Currency |
Malaysian ringgit |
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Maturity date |
30th September 2024 |
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Lead manager(s) |
AmInvestment Bank, CIMB, Hong Leong Bank, HSBC Amanah, Maybank Investment Bank, RHB Islamic, Standard Chartered |
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Lead arrangers(s) |
CIMB, HSBC Amanah, Maybank Investment Bank |
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Governing law |
Malaysian law |
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Legal advisor(s)/council |
Christopher & Lee Ong, on behalf of the joint lead arrangers |
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Islamic structure |
Murabahah via Tawarruq arrangement, Musharakah, Mudarabah, Ijarah, Wakalah Bi Istithmar
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Listing |
No |
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Underlying asset |
Underlying assets |
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Rating |
‘AAA/Stable’ by RAM Ratings |
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Shariah advisor(s) |
CIMB Islamic, HSBC Amanah, Maybank Islamic and Amanie Advisors |
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Tradability |
Yes |