Egypt - EFG Hermes, a leading investment bank in Frontier and Emerging Markets (FEM), announced that it has successfully advised on the first securitized bond issuance for the Egyptian Mortgage Refinance Company (EMRC) worth EGP 472m. This is the first issuance in a newly approved securitization program of EGP 3bn.

EMRC is the first refinance mortgage company to securitize portfolios for mortgage companies in the Egyptian market. For this issuance, EMRC acquired the securitized portfolio from Bedaya Mortgage Finance, which acted as the transaction’s servicer.

The issuance consists of three tranches with different tenors and credit ratings from Middle East Ratings and Investors Service (MERIS). The first tranche is valued at EGP 66.1m with a tenor of 13 months and a credit rating of AA+. The second tranche is valued at EGP 193.5m with a tenor of 36 months and a credit rating of AA. The third tranche is valued at EGP 212.4m with a tenor of 69 months and a credit rating of A.

Maie Hamdy, Managing Director – Debt Capital Markets at EFG Hermes, said that the issuance reflects EFG Hermes’ commitment to driving innovation and progress in the financial market. She said that EFG Hermes has extensive expertise as a financial services leader and a pioneer in Egypt’s debt capital market. She also said that EFG Hermes has advised on various securitization deals in the country and attracted widespread investor interest. She added that EFG Hermes is proud to be part of this milestone, supporting growth and innovation in the mortgage industry.

Ehab Abou Ali, Managing Director from EMRC, said that the issuance marks an important advancement for EMRC and the primary mortgage market in Egypt. He said that by securitizing portfolios for mortgage companies, EMRC aims to enhance their liquidity, strengthen their capital structure, and promote accessibility for homeowners and prospective buyers. He also said that this collaboration with EFG Hermes aligns with EMRC’s mission to facilitate the development of the housing finance sector and to achieve its goals and long-term growth strategy.

This issuance follows EFG Hermes’ successful closing of several securitized bond issuances for various companies in Egypt, such as Palm Hills Development, Bedaya Mortgage Finance, Madinet Masr (previously Madinet Nasr for Housing and Development), Al Taamir Mortgage Finance – Al Oula, Valu, and Misr Italia Properties.

EFG Hermes acted as the book-runner, underwriter, and co-financial advisor for the transaction alongside Al Ahli Pharos. Dreny and Partners acted as the legal advisor, while KPMG acted as the auditor. The National Bank of Egypt (NBE) and Arab African International Bank (AAIB) acted as the underwriting banks, with AAIB acting as the transaction’s custodian.

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