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Sunday, 21 February 2021

Raya’s Aman to tap securitization market in 1Q2021

Raya subsidiary Aman is planning to take EGP 600 mn in securitized bonds to market before the end of the quarter, Raya’s CFO Hossam Hussein said. The sale will be open to qualified institutional investors, banks, and other financial institutions, and will be split into tranches with tenors ranging from six months to over five years, Hussein noted. The company plans to use the proceeds to fund its expansion plans in 1H2021, he added, without providing details on planned investments.

Advisors: CIB and the National Bank of Egypt as lead managers and promoters and Dreny and Partners Law Firm as counsel. UHY, meanwhile, will act as a financial advisor and auditor.

Raya’s debt fund isn’t part of the plan: The issuance is a traditional offering of securitized bonds that receive a credit rating and are taken to market through an SPV — the company isn’t bringing in a fund it is planning to set up as an alternative to traditional securitization, Ahmed NourEldin Hassan, Raya’s head of corporate finance and investment, told us. Sources said earlier this month that Raya is mulling setting up a “movable assets” fund that would raise money to fund non-banking financial services (NBFS) companies by investing in their portfolios, including Raya’s own subsidiaries. Chatter in the market was that Aman could sidestep a traditional offering and instead tap the fund. Hassan says while Raya is still interested in the fund, it’s still weighing “the pros and cons.”

Unclear on what securitization is? Enterprise Explains has your back.

Securitization isn’t the only thing in Aman’s pipeline: The company has plans to debut on the EGX. It’s targeting an initial public offering in the coming two years, by which time it hopes to have captured more market share.

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