CIMB Islamic and Cagamas have completed Malaysia’s first MYOR-i-linked sukuk, Islamic Profit Rate Swap and asset purchase transaction.
The transactions include a RM300 million one-year MYOR-i sukuk, a RM100 million five-year Islamic Profit Rate Swap with caps and floors, and a RM250 million transaction under Cagamas’ Purchase with Recourse Programme.
MYOR-i is Malaysia’s Islamic risk-free rate benchmark.
Bank Negara Malaysia has been encouraging the industry to adopt MYOR-i as a market benchmark rate.
CIMB acted as lead manager and execution partner for the transactions.
The bank also developed supporting infrastructure, including benchmark swap curves, transaction documentation and risk management tools for MYOR-i-linked instruments.
Chu Kok Wei, CEO of Group Wholesale Banking at CIMB, said,
“Malaysia’s maiden MYOR-i benchmark issuances by Cagamas set a vital precedent for the market, establishing a framework for future innovation in Sukuk structuring while aligning with Bank Negara Malaysia’s aspiration for the industry to transition towards MYOR-i as market benchmark rate. ”
Kameel Abdul Halim, President and CEO of Cagamas, said,
“The successful execution of these transactions demonstrates the industry’s collective commitment to strengthening the Islamic financial market ecosystem and expanding the suite of Shariah-compliant funding and risk management solutions available to market participants.”
Cagamas is Malaysia’s second-largest issuer of debt instruments after the Malaysian government.
It supports liquidity and financing availability in the country’s housing and financial sectors.
The transactions are intended to support wider MYOR-i adoption while improving liquidity, transparency and risk management options in Malaysia’s Islamic capital markets.
Featured image: Edited by Fintech News Malaysia, based on image by starmultikharisma via Magnific
