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Tuesday, 29 December 2020

TMG, Sarwa, and CIRA makes three

The Financial Regulatory Authority (FRA) has signed off on EGX-listed private education outfit CIRA’s EGP 600 mn sukuk issuance, FRA chief Mohamed Omran announced in a statement yesterday (pdf). Proceeds from the offering will fund CIRA’s expansion plans in K-12 and higher education. The sukuks will carry a tenor of 84 months and the offering will be open to private institutional and high-net-worth investors, Omran noted in the statement. The sukuk will be backed by four of CIRA’s K-12 schools, the company noted in a bourse filing last week.

This brings the total number of corporate sukuks offered this year to EGP 5.1 bn, Omran said. CIRA’s offering will be the third issuance of corporate sukuk in Egypt, following Talaat Moustafa Group’s EGP 2 bn offering in April and Sarwa Capital’s EGP 2.5 bn sale in November, Omran emphasized. While CIRA has yet to comment, Omran’s statement and CIRA’s own initial closing timetable of the 27 December would indicate that we should expect an announcement on the sale this week.

EGP 10 bn in corporate sukuks are expected to be on offer in 2021, Omran added, echoing statements by other FRA officials last month. We’re hearing of a potential EGP 2.5 bn Amer Group issuance in 1Q2021. The Sarwa-managed offering could be Egypt’s first hybrid sukuk issuance with a mix of ijara and mudaraba bonds on offer. We’ve also heard that an unnamed financial services company is working on a EGP 500 mn mudaraba sukuk issuance, and that an agriculture company is looking at a EGP 250 mn “istizraa” issuance. Both are reportedly eyeing a 1Q2021 date.

Advisors: EFG Hermes Investment Banking is sole financial advisor, lead arranger and bookrunner for the transaction, while EFG Hermes Sukuk Co. will be the issuer for the EGP-denominated sukuk. Ahli United Bank, Suez Canal Bank and Banque du Caire are underwriters. Prime Capital as independent financial advisor. Zulficar & Partners is providing counsel, and Meris will provide the credit rating.

ON THE SECURITIZATION FRONT- TMG appears to be edging ahead with the issuance of EGP 885 mn in securitized bonds, according to a company bourse filing (pdf) yesterday. The disclosure simply notes that such an issuance is in-line with its business practices, so more of a non-denial than an actual confirmation. Earlier this week, reports had emerged that TMG subsidiary Al Rehab Securitization was planning the issuance with EFG Hermes acting as financial advisor and managing the issuance, while two other unnamed banks will also play a role.

TMG is also in talks with banks for a EGP 1.2 bn loan to fund projects in the New Administrative Capital, the statement says.

ALSO IN DEBT- The European Bank for Reconstruction and Development is reportedly interested in funding as much as 50% of the 6th of October drydock, sources close to the matter tell Al Mal.

Want to catch up on what happened with debt in 2020, read our Year in Review on the subject here.

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