Launch Partners

Sunday, December 10, 2023

Launch Partners

Case study: Cagamas’s green housing portfolio Sukuk

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.

Cagamas’ Inaugural Green Housing SRI Sukuk

RM90 million (US$19 million)

29th September 2023
Summary of terms and conditions
Size of issue
RM90 million (US$19 million)
Mode of issue
Private placement, bookbuilding, bought deal
To fund the purchase of a green home financing portfolio
Profit rate
Malaysian ringgit
Maturity date
30th September 2024
Lead manager(s)
AmInvestment Bank, CIMB, Hong Leong Bank, HSBC Amanah, Maybank Investment Bank, RHB Islamic, Standard Chartered
Lead arrangers(s)
CIMB, HSBC Amanah, Maybank Investment Bank
Governing law
Malaysian law
Legal advisor(s)/council
Christopher & Lee Ong, on behalf of the joint lead arrangers
Islamic structure
Murabahah via Tawarruq arrangement, Musharakah, Mudarabah, Ijarah, Wakalah Bi Istithmar
Underlying asset
Underlying assets
‘AAA/Stable’ by RAM Ratings
Shariah advisor(s)
CIMB Islamic, HSBC Amanah, Maybank Islamic and Amanie Advisors

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