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Cagamas doubled its variable rate Islamic medium term notes (IMTN) issues

June 25, 2014

Cagamas Berhad (Cagamas), the National Mortgage Corporation of Malaysia, today concluded the pricing of its MYR 500 million Variable Rate IMTN. Proceeds from the issuance, which has a one year maturity, will be used to fund the purchase of Islamic financing from the financial system.

"The order book received a commendable bid to cover ratio of 2.62 times and was competitively priced at five basis points over the three month KLIBOR. The strong demand evidenced investors' acceptance to the Company's initiative to issue low duration instruments such as the Variable Rate IMTN during challenging market conditions", said Mr. Chung Chee Leong, President/Chief Executive Officer of Cagamas.

"The issuance which carries a floating rate, will increase the Company's existing Islamic and Conventional floating rate debts issue size to MYR 910 million as at 25 June 2014. The larger issue size is expected to promote secondary liquidity for such instruments and consequently, widen investor's acceptance. The Variable Rate IMTN which is the second issuance since the inclusion of the Company's debt securities in the HSBC ALBI index on 1 April 2014, would increase investment options to investors as well as funding instruments to other issuers and contributes positively to the development and maturity of the domestic bond market," he added.

The Variable Rate IMTN, which will be redeemed at their full nominal value on 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. 

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Source: CPI Financial