HLB & HLISB Conclude Inaugural RM 300 million Socially Sustainable Securitisation to Cagamas
Hong Leong Bank and Hong Leong Islamic Bank Conclude Inaugural RM 300 million Socially Sustainable Securitisation to Cagamas
Kuala Lumpur, 10 August 2021 – Hong Leong Bank and Hong Leong Islamic Bank (“HLB” or the “Bank”) have completed a socially sustainable securitisation exercise worth a total of RM300 million to National Mortgage Corporation of Malaysia, Cagamas Berhad (“Cagamas”). The transactions involved three years socially sustainable securitisations of RM200 million of Hong Leong Bank’s and RM100 million of Hong Leong Islamic Bank’s affordable home loans and financing respectively.
These affordable home financing assets are among HLB’s eligible socially sustainable assets that met the Bank’s and Cagamas’s stringent Environmental, Social and Governance (“ESG”) criteria. Subsequently, it enabled Cagamas to conclude their first double issuance of the ASEAN sustainability SRI sukuk (“SRI Sukuk”) and the ASEAN sustainability bonds (“Sustainability Bonds”), under their RM60 billion Islamic/conventional medium-term notes program.
Domenic Fuda, Group Managing Director and Chief Executive Officer of HLB shared that these socially sustainable assets are part of the Bank’s sustainability and ESG agenda. This includes the integration of ESG considerations in the value chain of banking products and services that will have more positive impact on environmental and social needs.
“In the finance industry, there is growing demand from investors as well as customers for sustainable financial and investment products including financing for affordable housing. This has led to this ESG-focused transaction, which is an initiative to promote and grow the Ringgit bond market with high-quality socially sustainable bond/sukuk offerings. This will also attract investors with ESG mandates to deploy capital towards socially responsible investing in the country.”
“We are pleased to work with Cagamas on our inaugural socially sustainable securitisation exercise and as this type of financing evolves, the Bank will be looking for ways to do more socially sustainable securitisation exercises on other types of financing.”