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Thursday, 9 April 2020

TMG to issue Egypt’s first corporate sukuk after securing FRA approval

DEBT WATCH- FRA approves Egypt’s first ever corporate sukuk issuance: The Financial Regulatory Authority (FRA) has approved Talaat Moustafa Group’s (TMG) planned EGP 2 bn corporate sukuk issuance, it said in an official statement (pdf). TMG subsidiary the Arab Company for Projects and Urban Development will sell the shariah-compliant bonds via private subscription and will list them on the stock exchange to be publicly traded by investors. TMG announced plans earlier this year to launch a three-year EGP 4.5-5 bn sukuk program in April to finance the company’s real estate leasing projects.

About the issuance: The sukuk carry a 57-month tenor, maturing at the end of 2024, and each bond will have a nominal value of EGP 100. Payment for the bonds will be expedited during trading but they will not be transferable into shares, the FRA said. The underlying asset linked to the sukuk will be TMG's open-air mall in Madinaty, in which the investors will have partial ownership.

The issuance is 2.5x oversubscribed already, the local press reports.

FRA does about-face on sukuk regs, allowing TMG sukuk to go to the EGX: The sukuk regulations published last year allowed for sukuk to be sold only via private placements. In his statement yesterday, FRA chief Mohamed Omran announced that the regulator had relaxed these rules, paving the way for TMG to list its securities on the EGX.

Advisors: EFG Hermes is leading the sukuk issuance for TMG, according to an emailed statement (pdf).

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