Premium International for Credit Services announced the closing of Egypt’s first short-term securitisation transaction, worth 167 million Egyptian pounds ($10.37 million).
The consumer finance company’s bond is backed by a portfolio of consumer card receivables totaling 184 million Egyptian pounds, the company said in a statement. The bond consists of a single 10-month tranche with a fixed coupon rate of 12.59 percent.
Paul Antaki, the Founder and CEO of Premium International said: “This is the first tranche of Premium’s two-year program of issuing EGP 2 billion short-term securitized bonds, an attempt to diversify the financing sources and to off load our balance sheet through monetizing EGP 2.5 Billion worth of net present value of receivables associated with debt collection and consumer credit.”
The issue received a “Prime 1 Rating”, the strongest amongst other Egyptian bond issuances as quoted by Middle East Ratings and Investor Services (MERIS), the company said.
The transaction was approved by the Financial Regulatory Authority (FRA) and falls under the new short-term debt instrument decree number 172 of 2018.
EFG-Hermes was the lead manager to the issuance as well as its book-runner and underwriter. Arab African International Bank (AAIB) was tapped as underwriter, placement agent and custodian of the transaction.
The offering was successfully subscribed by AAIB for a 50 percent share and the remaining 50 percent were subscribed by several investment funds, the company said.
(Reporting by Gerard Aoun; editing by Seban Scaria)
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