HLB and Cagamas concludes RM300m green deal

It is Malaysia's first corporate issuance relating to green housing loans and financing.

Hong Leong Bank and its subsidiary Hong Leong Islamic Bank and Cagamas Berhad have concluded a $63.53m (RM300m) green housing loan and financing transaction.

A joint statement said that the transaction was funded by the issuance of Cagamas' one-year ASEAN Green Bond worth $44.47m (RM210m) and one-year ASEAN Green SRI Sukuk worth $19.06m (RM90m) under Cagamas' $12.71b (RM60b) Conventional/Islamic Medium Term Notes programme.

The issuances of the ASEAN Green MTNs by Cagamas are Malaysia's first corporate issuances relating to green housing loans and financing.

The green housing assets comprise green residential properties and buildings utilising GreenRE and Green Building Index (GBI) certifications as their qualifying eligibility criteria. 

Previously, Cagamas had collaborated with HLB to issue an ASEAN Sustainability Bond to fund the purchase of affordable housing loans in 2021.

“The increasing demand for green asset financing highlights the urgency of addressing climate impact and sustainability concerns. It also reflects a growing awareness that sustainable business practices are not just the right thing to do but also essential for long-term economic viability and environmental stewardship. We are pleased to work with Cagamas on our maiden green assets transaction and we look forward to expanding our collaboration to other types of financing,” Kevin Lam, Group Managing Director and CEO of HLB said.

To date, Cagamas has cumulatively issued $610m (RM2.9b) worth of sustainability-related bonds and Sukuk under its RM60b Conventional/Islamic Medium Term Notes programme.  

Proceeds were channelled in accordance with the Cagamas Sustainability Bond/Sukuk Framework, which is aligned to internationally recognised market principles, standards and best practices, to support the growth of Malaysia's social and green finance market.