EFG Hermes Concludes Advisory on Bedaya Mortgage Finance’s Second Securitization Issuance Worth EGP 958 million

This issuance marks the second in a wider EGP 3 billion securitization program for Bedaya, with the first issuance in 2022 breaking ground as the first-of-its-kind for a real estate mortgage company in Egypt

EFG Hermes, the leading investment bank franchise in Frontier and Emerging Markets (FEM), announced today that its investment banking division has successfully concluded the second, EGP 958 million securitized bond issuance for Bedaya Mortgage Finance, Egypt’s first non-bank online mortgage provider and one of EFG Hermes Holding’s non-bank financial institutions (NBFI). The bond, which comes as part of a wider EGP 3 billion securitization program, is backed by a mortgage portfolio assigned to EFG Hermes, the issuance’s special purpose vehicle (SPV).

The bond is comprised of six tranches with both fixed and variable yields, structured as follows:

Fixed Yield Tranches:

• Tranche A – Valued at EGP 15.6 million with a 13-month tenor and a credit rating of AA+ from Middle East Rating and Investors Service (MERIS)
• Tranche B – Valued at EGP 49.2 million with a 36-month tenor and a credit rating of AA from MERIS
• Tranche C – Valued at EGP 84.2 million with an 80-month tenor and a credit rating of A from MERIS

Variable Yield Tranches:

• Tranche A – Valued at EGP 93.0 million with a 13-month tenor and a credit rating of AA+ from MERIS
• Tranche B – Valued at EGP 262.9 million with a 36-month tenor and a credit rating of AA from MERIS
• Tranche C – Valued at EGP 453.0 million with an 84-month tenor and a credit rating of A from MERIS

Commenting on the issuance, Maie Hamdy, Managing Director – Debt Capital Markets at EFG Hermes said, “Over the years, our debt capital market practice has established a deep-rooted presence across a myriad of sectors, playing a pivotal role in bringing to market products that enable businesses to generate capital to grow and scale their operations. We’re not only proud to have closed yet another successful issuance in this key sector, but also to be capitalizing on the synergies inherent in the Firm’s business model to unlock growth opportunities across the Group, in line with its strategy to offer premium end-to-end financial services to its clients. With the securitized bond market particularly witnessing significant growth this year, the issuance garnered sizeable interest from investors based off the success of the first landmark issuance as well as the strength of Bedaya’s business model and vision to transform the real estate mortgage landscape.”

This issuance comes on the heels of Bedaya’s first issuance, worth EGP 651.2 million, which marked the first-of-its-kind transaction in the real estate mortgage space with tenors reaching up to c.10 years. The division also concluded several securitization issuances for EFG Hermes Holding’s subsidiaries over the course of 2022, including EFG Hermes Corp-Solutions’ second securitized bond issuance worth EGP 2.0 billion — its largest to date. EFG Hermes investment banking also concluded advisory on valU’s second and third securitized bond issuances during the year, worth EGP 532.6 million and EGP 854.5 million, respectively.

Tarek Abou-Gendia, CEO and Managing Director of Bedaya, said, “We are incredibly proud to be building on the success of our first issuance, which made headlines and garnered significant traction from regional and global investors when it first hit the market in 2022. The continued support of EFG Hermes enables us to realize growth opportunities, as we work to provide clients with the best possible service offering in the market by utilizing key debt instruments that will enable us to deliver on our ambitious targets for expansion.”

EFG Hermes acted as sole financial advisor, book-runner, underwriter, and lead arranger on the transaction. Dreny and Partners acted as legal advisor, KPMG acted as the auditor, while National Bank of Egypt (NBE), Commercial International Bank (CIB) and Arab African International Bank (AAIB) acted as the underwriting banks. NBE also acted as the custodian bank.