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Wednesday, 30 October 2019

Raya signs off on issuing securitized bonds worth EGP 500 mn

Raya issues securitized bonds worth EGP 500 mn: Raya Holding signed yesterday its first securitized bond issuance for its subsidiaries, Raya Electronics, Aman Financial Services, and Aman Microfinance, worth EGP 500 mn, Hapi reports. The issuance was in four tranches, three of which were short-term, with maturities of six, nine and twelve months. The fourth tranche had a 36 month matury. The weighted average coupon yield due to bondholders is about 12.7%. Raya Chairman and Managing Director Medhat Khalil sais that the move will help fund Raya’s plans to expand in Saudi Arabia, Nigeria, Dubai, and Poland without disclosing the sectors.

Raya aims to issue more bonds next year, but it’s anyone’s guess as to the size. Hapi puts the figure at EGP 700 mn, while Masrawy says the company is raising it to EGP 1 bn.

CIB, the National Bank of Egypt and Attijariwafa Bank managed the issuance. CIB held the largest share of the issuance with EGP 275 mn, while NBE’s share was was EGP 150 mn. Attijariwafa Bank managed EGP 75 mn of the issuance, Raya CFO for Investments Hossam Hussein said at a press conference yesterday. Dreny & Partners Law Firm acted as legal counsel.

Meanwhile, CIB is considering several new securitized bond issuances in Egypt, CIB CEO Hussein Abaza told Al Mal without hinting the company nor the amount. The increase in financial inclusion will help the banking sector shore up its liquidity, and make financial products geared towards corporate funding much more appetizing. Abaza also noted that CIB is still working to further expanding into another African country following the opening of it representative office in Ethiopia in April. CIB intended to enter the Kenyan market when it finds the right opportunity as part of its strategy for expansion in east Africa, our friend Mohamed Sultan had said before. CIB has also identified Tanzania and Uganda as being potential markets for expansion.

Meanwhile, EFG Hermes closes first short-term securitized bond issuance for Premium International: The Raya issuance came as EFG Hermes closed its first short term securitization transaction in Egypt worth EGP 167 mn for consumer finance company Premium International for Credit Services, according to a company statement (PDF) yesterday. The issuance consists of a single 10-month tranche rated “Prime 1 Rating” — the highest rating by Middle East Ratings and Investor Services (MERIS). EFG Hermes acted as the sole financial advisor, sole arranger, and co-underwriter along with The Arab African International Bank, which is also the custodian. Dreny & Partners acted as the Legal Advisor and KPMG acted as the Financial Auditor for the transaction.

Premium to issue EGP 2 bn in the coming two years: “We look forward to working closely with Premium with regards to the remaining issuances under the first short term program, approved by the FRA in October, amounting to a total of EGP 2 bn over a period of two years,” said the Co-head of investment banking at EFG Hermes Mostafa Gad.

EFG to ratchet up securitized bond issuances this year: “EFG Hermes is also in the process of closing the first unsecured short-term note in the Egyptian market along with a new securitization transaction in the fourth quarter of 2019, notwithstanding several other securitization and bond issuances currently in the Investment Banking Division’s pipeline,” the investment bank said.

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