Islamic Housing Debt Securitization Scheme

Definition of "Islamic Housing Debt Securitization Scheme"

A housing scheme introduced by Cagmas Berhad Malaysia, it mobilizes funds by issuing ‘Bon Mudharabah Cagmas’ (BMC). The BMCs are issued on the basis of profit-sharing. The bondholders and Cagmas share the profit based on specific profit-sharing ratios. Cagmas uses these funds to purchase existing Islamic housing debts of Bank Islam Malaysia Berhad (BIMB) and other Islamic financial institutions at a discount. The discount represents profits to be shared between Cagmas and BMCs holders.