January, 2022

First securitisation bonds issuance for MNHD worth EGP 300m completed: EFG Hermes

EFG Hermes has announced that its Promotion and Underwriting Sector succeeded in completing the first issuance of securitisation bonds for Madinet Nasr Housing and Development (MNHD) with a value of EGP 300m as part of a 3-year bond issuance programme worth EGP 3bn.

Hermes added that the securitisation bonds are secured by a receivable portfolio of EGP 373.9m for the first issue, according to a statement from the company to the Egyptian Exchange on Tuesday.

Furthermore, Hermes said that the bonds were offered in 3 tranches at a fixed interest rate, the first will be paid in fixed instalments, and the second and third will be distributed according to the portfolio’s returns.

Tranche A is worth EGP 120m and has a duration of 13 months and has a credit rating of AA+ from the Middle East Credit Rating and Investors Service (MERIS). Tranche B is worth EGP 135m and has a duration of 3 years and is rated AA. Tranche C, however, has a value of EGP 45m, a duration of 5 years, and is rated A.

Maged Al-Ayouti, the Managing Director of the Promotion and Underwriting Sector at EFG Hermes, said that this issuance comes two weeks after the completion of a financing deal worth EGP 750m in December 2021, in which EFG Hermes acted as the financial adviser and financier.

This deal represents the second issuance of securitisation bonds and the third deal in which EFG Hermes provides advisory services for MNHD.

The first securitisation bonds agreement was struck in 2019, and the second financing agreement, which was worth EGP 750m, was signed at the end of December 2021 in the form of a financial leasing, where the Promotion and Underwriting Sector acted as the financial adviser for the deal and EFG Hermes Financing Solutions — a wholly owned subsidiary of EFG Hermes Holdings — as the commissioner.

Abdullah Salam, CEO and Managing Director of MNHD, said that the integrated partnership with EFG Hermes will allow the company to employ more sustainable financing solutions in implementing its long-term expansion plans, which contributes to strengthening its endeavours to develop high-quality real estate projects in Taj City and Saray.