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Wednesday, 21 September 2022

Contact Financial closes EGP 2 bn sukuk issuance

Contact Financial Holding has closed an EGP 2 bn sukuk issuance, after getting the greenlight from the Financial Regulatory Authority (FRA) yesterday, Contact Financial Holding CEO Said Zater told Amwal El Ghad. The sharia-compliant mudaraba sukuk has a seven-year tenor and the proceeds will be used to finance car purchases for clients of its subsidiary, Contact Credit, the regulator said in a statement (pdf).

Who’s buying in: Baraka Bank, and Arab Investment Bank, Zater said.

Advisors: The issuance was co-underwritten by Misr Capital and Al Ahly Pharos. Sarwa Promotion and Underwriting, a subsidiary of Contact, was the lead arranger. Alieldean Weshahi & Partners acted as the legal advisor, and Financial Capital Services — formerly Baker Tilly Wahid Abdel Ghaffar & Co — was appointed as an independent financial advisor.

It’s been a quiet year so far for sukuk, which saw only one EGP 3.25 bn sukuk issuance from Palm Hills Developments (PHD) in March. This marks Contact Financial’s (formerly Sarwa Capital Holding) third sukuk issuance by our count, after closing the only issuance of the year in 2021 and another in 2020.

More coming? Contact Financial’s sukuk arm is preparing for three more issuances before the end of the year with a combined value of around EGP 4 bn, Zater told us when we spoke on the phone yesterday. The company also expects to issue EGP 1-1.5 bn worth of securitized bonds within a month for its consumer finance business.

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