EFG Hermes, the leading investment bank franchise in Frontier Emerging Markets (FEM), and EFG Hermes Holding’s wholly-owned subsidiary, EFG Hermes Corp-Solutions, announced today the successful conclusion of the latter’s second issuance of a securitization bond worth EGP 2.0 billion. The bond is backed by a receivables portfolio of c. EGP 2.9 billion, representing 24 lease contracts.
The securitization bond comprises of three tranches, where tranche A is valued at EGP 260 million, with a tenor of 13 months, and a credit rating of AA+ from Middle East Ratings and Investor Services (MERIS). Tranche B is valued at EGP 890 million, with a tenor of 36 months, and a credit rating of AA from MERIS. The final tranche, tranche C, is valued at EGP 850 million, with a tenor of 72 months, and a credit rating of A- from MERIS.
Commenting on the issuance, Moustafa Gad, Co-Head of Investment Banking at EFG Hermes said, “Following the success of the first issuance in Corp-Solutions’ securitization program, we’re proud to have successfully concluded this second issuance, providing EFG Hermes Corp-Solutions with substantial new funding to expand their operations. The completion of this second transaction among many others reflects the DCM team’s commitment to support the growth of businesses during today’s challenging financial landscape, fostering job creation and economic development. With our all-embracing product offering in the DCM space and our strong team of top professionals in the field, our objective is to provide world-class corporate financing solutions and alternatives to serve our clients’ needs and adapt to the evolving market dynamics.”
“This securitization transaction is another milestone met in accelerating our operational growth and solidifying our position in the Egyptian market, and we’re proud to have secured such high ratings despite being late comers to the market, a testament of our strong financial position and solid business strategy.” said CEO of EFG Hermes Corp-Solutions, Talal El Ayat. “Diversifying our funding sources helps us achieve our goals in expanding our operational footprint and growing our client base through providing a wide variety of novel financial solutions, as we continue our commitment to support private sector growth.”
EFG Hermes Corp-Solutions enjoys a healthy and diverse client mix of 20% SMEs and 80% mid-cap to large corporations covering a myriad of sectors such as real estate development, logistics and maritime, printing and packaging, education, healthcare, trading and distribution, among others. This year, the company aims to focus on adding on more SMEs to its roster of clients and leveraging synergies across EFG Hermes Holding’s verticals and subsidiaries to further expand the business.
By the end of July 2022, EFG Hermes Corp-Solutions’ leasing and factoring businesses ranked second YTD in the Egyptian market. The leasing business booked a 12.52% market share with a total value of contracts amounting to EGP 5.8 billion, while the factoring business recorded a market share of 13.99% with a total value of bookings amounting to EGP 2.4 billion – according to the latest FRA report.
The issuance follows the Firm’s conclusion of a series of securitization transactions in 2022 including advisory on Pioneers Properties for Urban Development second securitization issuance, Bedaya Mortgage Finance’s first securitization issuance, a securitization issuance for MNHD, the sixth issuance for Premium International for Credit Services, and valU’s second securitization issuance. This is the second issuance for Corp-Solutions following on the heels of its first successful securitization issuance of EGP 750 million.