Kuala Lumpur, 29 April 2009 – Malaysia Building Society Berhad (MBSB) today signed a Memorandum of Understanding (MOU) with Cagamas, Maybank, Affin Bank and EON Bank on the Securitisation of Mortgages for RM 500 million facility.
The facility of RM 500 million with Cagamas Berhad under securitisation of mortgage assets by way of purchase with recourse with a back-to-back arrangement through Maybank, Affin Bank and EON Bank. This is one of MBSB’s initiative to have sufficient liquidity especially to accommodate the aggressive business expansion.
“With this facility, it will accommodate MBSB’s business expansion, especially in it’s new business direction. We are also introducing more new products focusing in Corporate Business and Mortgage,” said Tan Sri Abdul Halim Ali, Chairman of MBSB.
He added that the RM 500 million facility is shared among the participating banks of which Maybank will commit a sum of RM250 million, Affin Bank with RM150 million and EON Bank with RM 100 million. The tenure of the facility will be for five years.
Through this facility, the risk of the participating banks are minimal. In case MBSB defaulted in the facility, they are secured by the mortgage receivables.
“Through the asset securitisation facility, the advantages is due to its competitive pricing for MBSB by tapping the capital market through Cagamas bonds which is rated triple ‘A’ (AAA). This will be an avenue to hedge against interest rates risk especially during this turbulent time. It is timely for MBSB to embark into this Cagamas securitisation considering the interest rate is likely to increase in the near future. Therefore, MBSB is safe to lock at this preferential rate at this point of time, “ added Tan Sri Halim.
Tan Sri Halim also hoped that with the signing of MOU, it will be an eye opener to everyone to see how the cooperation between financial institution can contribute significantly toward the growth of business.