EFG Hermes announces completion of 2nd issue of Valeo securitization bonds at LE 532.6M

CAIRO - 17 August 2022: The Egyptian Financial Group Hermes Holding Company (EFG Hermes) announced the completion of the second issuance of securitization bonds for its subsidiary Valeo, at a value of LE 532.6 million, as part of a program to issue securitized bonds worth LE 2 billion.

 

The company stated, in a statement Wednesday, that the company obtained the approval of the Financial Regulatory Authority (FRA) on July 25, 2021 to proceed with the implementation of the program.

 

It explained that the securitization bonds are secured by a portfolio of notes receivable at a value of LE 609.1 million, and the securitization process has been assigned to it as a securitization company. 

 

The issuance received a credit rating (Prime-1) from the Middle East Credit Rating Corporation (MERIS), which is the strongest credit rating obtained by the process of issuing bonds in the Egyptian market.

 

The issuance will be in two tranches with maturity periods of 12 months, with the value of the first tranche at LE 479.34 million and LE 53.26 million pounds for the second tranche, the company added.

 

Securitization is the process of accumulating different types of debt instruments (assets) such as mortgages and other consumer loans and selling them as bonds to investors.

 

Mai Hamdi, Executive Director of the Debt Markets Department in the Promotion and Underwriting Sector at EFG Hermes, said that this issuance would enhance the company's ability to provide innovative solutions to its installment plans and programs.

 

EFG Hermes acted as the sole financial advisor and sole manager of the issue, as well as the sole regulator, promoter and underwriter of the issue. The Arab African International Bank also acted as the underwriter and custodian for the deal, Dreny & Partners acted as the legal advisor for the deal, and KPMG acted as the financial auditor of the issue.

 

In 2022, EFG Hermes implemented a number of deals, such as providing advisory services and completing the second issuance of securitization bonds for the Pioneers Properties Group for Urban Development, and completing the first issuance of securitization bonds for Bidaya Real Estate Finance and Nasr City for Housing and Development, in addition to the completion of the sixth issue within the securitization bond issuance program for Premium International for Credit Services.

 

In addition, the company succeeded in completing the first issue of securitization bonds for its subsidiary Valeo, at a value of LE 322.5 million, in September of 2021.