Another state entity in Malaysia launched its latest securitization offering last week. Secondary mortgage company Cagamas, which has assumed the role of Malaysia's benchmark issuer in the last year, will issue a M$2.06 billion (US$530.8 million) mortgage-backed deal, the third out of its Cagamas MBS vehicle.

This will be the agency's second conventional MBS, akin to its M$1.6 billion debut in October 2004 (ASR, 10/18/04). Cagamas last tapped the market in July with a M$2.05 billion Islamic deal (ASR, 8/1/05).

Books for the latest issue opened on Nov. 28 and were due to close last Friday, with allocations confirmed that day. AmMerchant Bank and Standard Chartered are joint leads; with boutique firm ECM Libra Capital on board as financial advisor.

The transaction is collateralized by an M$2.9 billion pool of staff housing loans acquired by Cagamas from the government. Loan repayments are deducted directly from workers monthly salaries.

Rating Agency Malaysia and Malaysian Rating Corp. provisionally rated all seven tranches triple-A. Indicative pricing for the three-year piece is 3.84%-4.09%, a 35 to 60 basis point spread over Malaysian Government Securities (MGS). The five-year notes are being marketed at 4.23% to 4-48% (50 to 75 basis points over MGS), while the seven-year bonds will yield between 4.46% and 4.71% (55 to 80 basis points spread).

The ten-year tranche will offer between 4.84% and 5.14% (60 to 90 basis points over MGS), the 12-year piece 5.05%-5.35% (70 to100 basis points), while the 15-year paper has been marketed at 5.37%-5.67% (85 to115 basis points). Cagamas is also stretching Malaysian's ABS curve with the inclusion of a twenty-year tranche, offering a coupon between 5.64% and 5.94% (90 to 120 points over MGS).

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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