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Monday, 2 August 2021

Securitization market continues to heat up

Egypt’s securitization market shows no sign of sliding into summer vacation. After a slow start to the year, upmarket developer SODIC, Palm Hills Development, Premium International and Arabia Investments Holding subsidiary Rawaj have all closed issuances of asset-backed securities this year.

And the pipeline looks deep: SODIC, EFG Hermes, Contact Financial Holding, Edge Holding and Raya’s Aman have been reported as having plans to securitize parts of their portfolios.

That’s just one corner of the debt market: None of this takes into account the growing interest in the country’s sukuk market or the potential securitization of off-balance sheet cashflows.

The latest to join the fray: NUCA’s Al Taamir for Securitization, which is in talks with Al Oula to manage a EGP 650 mn securitized bond issuance on behalf of the leasing company, Al Taamir Chairman Mazen Hassan told Enterprise yesterday. The transaction isn’t a sure thing — it still needs approval of Al Oula’s board, he said. Hassan denied a report in the domestic press that quoted him saying Al Taamir is in talks with eight companies to manage sales worth EGP 5.5 bn. Al Taamir is negotiating with only three companies — Al Oula, Palm Hills and Mountain View — while declining to give us a total value.

There’s no word on when the Palm Hills issuance will take place: Originally slated for 1Q2021, the EGP 650 mn issuance will be triggered by Palm Hills when it hits an unspecified milestone, Hassan said, declining to give an estimated timeframe.

Al Taamir is also in talks with Mountain View, Hassan earlier told the local press (pdf). He declined to disclose the value of the transaction when we asked yesterday. The domestic press had quoted Hassan as saying that Al Taamir was also in talks with City Edge, Misr Italia, Redcon Construction, and Hyde Park Developments, which Hassan denied yesterday.

About Al Taamir: Al Taamir is a special purpose vehicle set up by the New Urban Communities Authority in 2008 to help securitize its portfolio of land sale contracts and raise finance for the establishment of new cities.

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