EFG Hermes’ investment banking division, the leading investment banking franchise in Frontier Emerging Markets (FEM), announced the close of the first issuance, worth EGP 300 million, in leading real estate development company Madinet Nasr Housing and Development’s (MNHD) three-year EGP 3.0 billion securitization program. The bond is backed by receivables portfolio of some EGP 373.9 million for the first issuance.
The bond is comprised of three fixed-interest tranches, with the first divided into fixed installments and the second and third tranches to be disbursed as pass-through of the proceeds of the portfolio. Tranche A is valued at EGP 120 million, with a tenor of 13 months, and a credit rating of (AA+) from Middle East Ratings and Investors Service (MERIS). Tranche B is valued at EGP 135 million, with a tenor of three years, and a credit rating of (AA) from MERIS. Finally, tranche C is valued at EGP 45 million, with a tenor of five years, and a credit rating of (A) from MERIS.
Maged El Ayouti, Managing Director and Deputy Head of Investment Banking at EFG Hermes, commented on the issuance, saying: “We are excited to further cement our leading role as providers of value-accretive solutions in Egypt’s Debt Capital Market (DCM) space with this latest step in our partnership with MNHD, a principal player in the real estate market. This issuance comes only two weeks following the funding of the EGP 750 million financing arranged and provided by EFG Hermes in late December 2021 in the form of a sale-and-lease back agreement, which is a testament to our ability to capitalize on our strong execution capabilities and cross-selling power to suit our clients’ needs.”
This transaction marks the second securitization issuance and the third financing advisory provided by EFG Hermes for MNHD. The first was MNHD’s debut securitization in 2019, while the second is the EGP 750 million financings funded in late December, with EFG Hermes’ Investment Banking division acting as the financial advisor for the transaction and EFG Hermes Corp-Solutions, a wholly-owned subsidiary of EFG Hermes Holding and one of Egypt’s leading leasing and factoring companies, acting as the lender.
“We are excited to take this next step that is an essential element of our newly established leadership strategy,” said Abdallah Sallam, President and Chief Executive Officer. “Our comprehensive partnership with EFG Hermes enables our Company to employ broader and more sustainable financing solutions that meet our long-term expansion goals, empowering us to continue developing high-quality real estate across our Taj City and Sarai projects.”
This issuance follows the Firm’s successful conclusions of an EGP 627.5 million securitization issuance for Pioneers Properties for Urban Development and the first issuance for EFG Hermes Corp-Solutions, valued at EGP 790 million, both in December 2021. The transaction also comes on the heels of the Firm’s successful advisory on Premium International for Credit Services’ sixth issuance, valued at EGP 170 million, on January 4, 2021.
EFG Hermes acted as the co-underwriter and sole financial advisor, transaction manager, book-runner, and arranger on the issuance. CIB also acted as underwriter and custodian.