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Islamic Finance

Malaysia’s national mortgage company Cagamas issues debut SRI sukuk for affordable housing

Cagamas, the National Mortgage Corporation of Malaysia, has sold its first ASEAN Sustainability SRI Sukuk, a three-year 100 million ringgit issue ($24 million).

Proceeds from the sukuk will be used to fund the purchase of eligible Islamic financing for affordable housing.

Cagamas at the same time issued 350 million ringgit in Islamic medium-term notes, according to a statement dated Oct 22.

The issuance by a public book building exercise attracted 2 billion ringgit in orders at initial price guidance.

The sale for the sukuk closed at a final price of 2.23% and 2.25% for the Islamic medium-term notes.

“We had participation from a diversified pool of investors, including a statutory body, sovereign wealth funds, pension funds, financial institutions, asset managers and insurance companies,” said Cagamas President/CEO Chung Chee Leong.

The SRI Sukuk for affordable housing is assigned the highest Social Benefit rating of Tier1 by RAM Sustainability Sdn Bhd under Cagamas’ Sustainability Bond/Sukuk Framework. The Framework comprises two social solutions – affordable housing and employment generation via Small and Medium Enterprises. It also comprises five green solutions which include renewable energy, energy efficiency, green buildings, low-carbon transportation and sustainable water and wastewater management.

The sales were led solely by RHB Investment Bank.

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