EFG Hermes, the leading investment bank franchise in Frontier and Emerging Markets (FEM), announced today that its investment banking division successfully closed an EGP 805.5 million securitized bond issuance for leading Egyptian real estate developer Madinet Nasr for Housing and Development (MNHD) — the second in an EGP 3.0 billion securitization program.
The bond is backed by a receivables portfolio of EGP 1.2 billion and is comprised of three fixed-interest tranches, with all tranches disbursed as “pass-through” proceeds of the portfolio. The tranches are structured as follows:
- Tranche A – valued at EGP 241.7 million, with a tenor of 13 months, and a credit rating of (AA+) from Middle East Ratings and Investors Service (MERIS)
- Tranche B – valued at EGP 310.1 million, with a tenor of 36 months, and a credit rating of (AA) from MERIS
- Tranche C – valued at EGP 253.7 million, with a tenor of 60 months, and a credit rating of (A) from MERIS
Maged El Ayouti, Managing Director and Deputy Head of Investment Banking at EFG Hermes, commented: “We are delighted to have partnered once again with MNHD, and to have successfully delivered its largest capital market transaction, supporting management as they move forward with executing their ambitious expansion plans. Leveraging our team’s unrivaled placement and execution capacities, the issuance comes on the heels of a series of successful capital market issuances for our clients in the Egyptian market — a testament to our relentless efforts to continue supporting the growth of the capital markets in the prevailing environment.”
This transaction is the latest in a series of successful debt deals closed by EFG Hermes for MNHD, with the first being the real estate player’s debut securitized bond in 2019, followed by an EGP 750 million sale and leaseback agreement between EFG Hermes Corp-Solutions and MNHD in 2021. Last year, the division successfully closed the first, EGP 300 million issuance as part of this wider EGP 3 billion program underscoring the group’s unmatched and ability to tailor bespoke solutions for clients through its universal financial service portfolio.
Abdallah Sallam, Executive President and Managing Director at MNHD, commented on the partnership, saying: “We’re pleased to be working with EFG Hermes to close this second issuance, which once again garnered significant interest from investors due to their confidence in our robust growth story, having delivered exceptional results in 2022 with gross contracted sales growing over three-fold compared to last year. Monetizing our portfolio forms the cornerstone of our strategy to deliver units ahead of schedule and expand our operational footprint to capture a larger share of demand within the rapidly growing real estate market. Our partnership with the leading investment bank franchise in FEM will carve out a path for further growth, enabling us to maintain our standing as the foremost provider of premium residential, commercial, and administrative properties in Egypt.”
EFG Hermes’ investment banking division leverages extensive DCM experience in the real estate space, having closed several back-to-back securitization deals for developers in recent years. Most recently, the division concluded Palm Hills Development’s EGP 638 million securitized bond following Misr Italia Properties’ second securitization issuance in a transaction worth EGP 986 million in 2022, a follow-on from the close of the first, EGP 794 million issuance in 2021. The division also advised on Pioneers Properties for Urban Development’s second issuance worth EGP 425 million and went on to complete a third issuance for the company in November 2022, worth EGP 292.5 million.
EFG Hermes acted as the sole financial advisor, lead arranger, bookrunner, and underwriter on the issuance. National Bank of Egypt (NBE) participated in this transaction alongside Arab African International Bank (AAIB) and Commercial International Bank (CIB) as underwriters, with CIB also acting as custodian bank. Dreny and Partners was legal advisor on the transaction.
