Are securitized bonds gaining momentum in our mortgage market?

A consortium of local mortgage lenders is mulling a securitization program that could be worth over EGP 2.5 bn, Enterprise has confirmed, just a week after the local mortgage market saw its first ever securitization. Al Oula, Al Ahly Mortgage Finance, and Amlak Egypt are part of the consortium currently negotiating the terms of a potential joint issuance, Al Oula MD and Vice Chair Ayman Abdel Hamid told Enterprise, confirming a report from Al Mal. The firms have not yet decided on a timeline for the issuance, he said.
Strength in numbers? The joint issuance will only go ahead if assessments show it will bring the companies higher returns than they would see through individual issuances, Abdel Hamid said. Each firm could issue securitized bonds on an individual basis if it proves more cost-efficient, he added.
Al Oula would issue EGP 1 bn of the securitized bonds in a first phase, Abdel Hamid told us. The company has already shortlisted three potential managers for its issuance, including Egyptian Mortgage Refinance, he said, according to Al Mal.
Al Oula had been looking to issue EGP 900 mn in securitized bonds in 1H 2022, according to local media reports back in January, while Al Ahly Mortgage Finance reportedly has plans to securitize EGP 1 bn of its portfolio this year.
Is securitization the latest hot ticket for mortgage lenders? This comes less than a week after EFG Hermes closed an EGP 651.2 mn securitized bond issuance on behalf of mortgage provider Bedaya, billed as the first ever for a real estate mortgage firm in Egypt. EFG expects to complete Bedaya’s full EGP 3 bn securitization program in the next three years.