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Wednesday, 9 June 2021

Palm Hills closes EGP 1.2 bn securitized bond sale

Palm Hills Development closed a fresh securitized bond issuance backed by a receivables portfolio of nearly EGP 1.2 bn, according to a press release (pdf). The bonds were issued in four tranches with ratings of AA+, AA, A, and A-.

The size of the sale is close to PHD’s record EGP 1.25 bn issuance that went to market last year. It includes the EGP 800 mn in securitized bonds approved for sale by PHD’s board of directors in April, as well as other bonds backed by the receivables of several other non-listed subsidiaries, IR manager Radwa Abu El Naga told us.

The securitization market has been lukewarm so far this year: PHD joins Rawaj — Arabia Investments Holding’s consumer finance subsidiary — as one of only two companies to close an issuance of asset-backed securities this year.

But the pipeline is deep: Everyone from Sodic, Misr Italia and Edge Holding to EFG Hermes, Sarwa Capital and Raya have announced plans to securitize parts of their portfolios, but all of them are yet to see the light of day.

ADVISORS- Contact Financial’s debt markets arm Sarwa Capital acted as financial advisor, lead manager, and arranger on the PHD transaction. Our friends at ALC Alieldean, Weshahi & Partners were counsel for the issuance, while Misr Capital Securities Brokerage “played for the first time the role of a trading intermediary in the secondary market with the aim of facilitating the entry of individual investors to invest in securitization bond.”

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