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Tuesday, 27 July 2021

Contact makes first sukuk sale this year

Contact closes its second EGP 2.5 bn sukuk offering: Contact Financial Holding, formerly Sarwa Capital Holding, has closed its second sukuk issuance worth EGP 2.5 bn, the company said in a statement (pdf). The sharia-compliant mudaraba sukuk carries a seven-year tenor and will be used to finance the expansion of Contact Credit and its subsidiaries. The security received a credit rating of A- by Middle East Ratings and Investors Service.

This brings Contact’s total sukuk issuances to EGP 5 bn after closing a EGP 2.5 bn offering last November.

The issuance is the first sukuk sale to take place in Egypt this year and the fourth since the Financial Regulatory Authority adopted the regulatory framework in 2019. In addition to Contact’s two sales, Talaat Moustafa Group and private education outfit CIRA also took sukuk to market last year

More sukuk sales to follow (we just don’t know when): Contact is cooperating with others, mainly real estate developers, to manage sukuk issuances worth EGP 5-7.5 bn through its sukuk arm, the Sarwa Sukuk Company. The planned offerings include a EGP 5.5 bn sale for Palm Hills Development, a EGP 3 bn issuance for Hassan Allam Properties, and a EGP 1.1 bn offering for Amer Group. In June, Wadi Degla Developments also revealed plans for a sukuk issuance worth some EGP 2 bn through Contact. It remains unclear when the companies plan to market the securities.

Advisors:The issue was co-underwritten by CIB and Ahli United Bank. Sarwa Promotion and Underwriting, a subsidiary of Contact, was assigned as lead manager and arranger on the transaction. Misr Capital and Banque Misr acted as underwriters. Alieldean Weshahi & Partners acted as the legal advisor, while Elite Consulting Group was the independent financial consultant on the transaction.

IN OTHER CONTACT NEWS: Contact Financial Holding and real estate marketplace Sakneen have joined forces to offer a one-stop-shop for people searching for both a new home and mortgage finance, according to a statement (pdf). Prospective homebuyers can look for properties eligible for financing on sakneen.com and receive preliminary approval. Contact is offering 10-year loans of up to EGP 3 mn to Sakneen clients. Sakneen earlier this year raised USD 1.1 mn in seed funding with “major participation” from Sarwa Capital.

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