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Tuesday, 11 May 2021

Sodic mulls securitized bond sale as Aldar continues DD

Sodic is reportedly planning to go to market with an offering of securitized bonds “in the next few weeks,” Al Mal reports, quoting sources it claims are in the know. The upmarket real estate developer is finalizing final regulatory approvals and has already sent a formal request to the Financial Regulatory Authority. It plans to use proceeds from the sale to finance its near-term investment plan, which involves purchasing new land in the North Coast, the sources claim.

Meanwhile, the UAE’s Aldar Properties is halfway through due diligence to acquire a majority stake in Sodic, Aldar CEO Talal Al Dhiyebi said on Bloomberg TV. The bid is “one of a number of [transactions] we are looking at in Egypt … [which is] one of the most lucrative and attractive real estate markets,” Al Dhiyebi said. Aldar submitted in March a non-binding offer to acquire at least 51% of SODIC’s shares at EGP 18-19 apiece. Sodic’s board then said it will allow due diligence to go ahead and would appoint EFG Hermes and an international advisor to provide counsel on the bid.

BACKGROUND- The securitization market has been busy so far in 2021, with developer Palm Hills being the latest to announce a sale when it closed an EGP 800 mn issuance late last month. EFG Hermes Corp-Solutions is also looking to securitize part of its portfolio this year after its total portfolio grew 55% last year, while Edge Holding is eyeing the securitization of a EGP 1 bn receivables portfolio next year. This is coming on the heels of a strong 2020 for the market as new sales picked up steam amid the pandemic.

What is securitization, you ask? You can read our recent in-depth explainer.

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