Business | Investment
First three-year sukuk bond issued in Malaysia
Corporation delivers new Islamic service
- Zawya Dow Jones
- Published: 00:00 August 19, 2010
Kuala Lumpur: Malaysian national mortgage corporation Cagamas Bhd said Wednesday it has issued a one billion Malaysian ringgit three-year Sukuk Al Amanah Li Al Istithmar, the first such Islamic bond of its kind to be issued in Malaysia.
The sukuk, part of Cagamas' five billion ringgit (Dh 5.8 billion) Islamic medium term note program, was priced at a yield of 3.48 per cent, Cagamas said in a statement.
"The tradable sukuk attracted strong demand from a wide and diverse investor base, evidenced by an impressive book building exercise which registered a subscription rate of 2.7 times," Cagamas said, adding that 43 per cent of the investors in the sukuk were offshore investors, mainly from the Middle East.
The sukuk structure is a type of asset-backed sukuk that precludes the principles of sale and buyback, trading of debt, pre-arranged transaction between multiple parties and undertaking, Cagamas said.
The issuance was jointly managed by Al Rajhi Banking & Investment Corporation (Malaysia) Bhd, RHB Investment Bank Berhad and The Royal Bank of Scotland Berhad. Al Rajhi and Amanie Business Solutions Sdn Bhd were the Shariah advisers.
Cagamas Berhad, the National Mortgage Corporation and leading securitisation house, was established in 1986 to promote the secondary mortgage market in Malaysia.
Securitisation leader
Cagamas Berhad has, through the years, evolved and diversified its business model from that of a national mortgage corporation seeking to aid Malaysians with affordable housing, to becoming a leader in securitisation.
It issues debt securities to finance the purchase of housing loans and other consumer receivables from financial institutions and non-financial institutions.
The provision of liquidity at a reasonable cost to the primary lenders of housing loans encourages further financing of houses at an affordable cost.
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