Cagamas to issue Islamic Commercial Papers up to RM500 million

PETALING JAYA: Cagamas Bhd, the national mortgage corporation of Malaysia, will issue three-month Islamic Commercial Papers (ICP) amounting to RM500 million.
The ICP will be issued under the Islamic Commodity Murabahah structure and proceeds from the issuance will be used to fund the purchase of Islamic financing from the financial system.
Cagamas CEO Chung Chee Leong said the ICP has increased the supply of short-term corporate sukuk outstanding in the domestic market by 16%, at a time of reduced supply of short-term government papers.
“The ICP issuance has received overwhelming response and has succeeded in obtaining a bid-to-cover ratio of over three times as it offers additional investment options to short-term sukuk investors,” he said in a statement.
“The ICP were competitively priced against the three-month KLIBOR, with orders received from a diversified pool of investors including financial institutions, insurance companies and asset managers,” he added.
This brings the company’s aggregate issuance for the year to RM5.9 billion.
The ICP, 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.