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Treasury & Capital Markets
Cagamas and BSN team up on affordable housing
Malaysia’s mortgage corporation to fund transaction via multi-tenured Asean SRI sukuk
The Asset 30 Nov 2023

Cagamas, the National Mortgage Corporation of Malaysia, has concluded an affordable housing transaction worth 500 million ringgit (US$107.41 million) with Bank Simpanan Nasional (BSN).

The transaction was funded through Cagamas’ multi-tenured Asean social sustainable and responsible investment sukuk (SRI sukuk), comprising 150 million ringgit for the one-year tenor, 100 million ringgit for two years, and 250 million ringgit for three years, issued under its 60 billion ringgit conventional medium-term notes and Islamic medium-term notes (CMTN/IMTN) programme.

BSN will use the funding to support affordable housing initiatives, focusing on the financing aspect.

"BSN recognizes the critical role financial institutions play in addressing societal challenges, particularly in the context of affordable housing,” says BSN chief executive Jay Khairil. “Our substantial commitment to sustainable and responsible investments underscores our dedication to supporting the development of affordable housing solutions, and we believe that this initiative will contribute to a more sustainable and resilient future for all."

The affordable housing transaction, comprising BSN's home financing facilities – Youth Housing Scheme and Skim Rumah Pertamaku – has met Cagamas' eligibility criteria for affordable housing. Cagamas’ SRI sukuk, which is assigned a Tier 1 social benefit rating by RAM Sustainability, attracted a diversified pool of investors, including institutional investors, banks, and a statutory body, which enabled Cagamas to price its issuances competitively above the corresponding Malaysian government securities.

Cagamas has to date issued 3.4 billion ringgit worth of sustainability-related bonds and sukuk under its CMTN/IMTN programme.

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