EFG Hermes Concludes Advisory on valU’s Second Securitization Issuance Worth EGP 532.6 million

The transaction builds on the success of valU’s first EGP 322.5 million issuance in September of last year, pushing forward the company’s first-of-its-kind securitization program for a Buy-Now, Pay-Later (BNPL) fintech platform

EFG Hermes, the leading investment bank franchise in Frontier Emerging Markets (FEM), announced today that its Debt Capital Markets (DCM) unit under the investment banking division successfully closed valU’s second securitization issuance worth EGP 532.6 million, which comes as part of valU’s wider EGP 2 billion program that was approved by the FRA on 25 July 2021.

The bond is comprised of two 12-month tranches, each rated Prime-1 by Middle East Rating Services (MERIS), the highest among other Egyptian bond issuances according to MERIS. The first tranche is worth EGP 479.34 million while the second is worth EGP 53.26 million, and the issuance is backed by a receivables portfolio of EGP 609.1 million assigned to EFG Hermes as the issuance’s special purpose vehicle (SPV).

Commenting on the issuance, Maie Hamdy, Managing Director – Debt Capital Markets at EFG Hermes said, “After the demonstrated success of the first issuance in valU’s first-of-its-kind securitization program for a BNPL fintech platform, we are pleased to have successfully concluded this second issuance, which provides valU with alternative funding to grow their installment payment programs. The finalization of this transaction out of many others is proof positive of the DCM team’s commitment to its clients to provide tailored solutions that are suitable to the respective economic and financial environments. With our comprehensive product offering in the DCM space and our team comprising top professionals in the field, our objective is to bring world-class corporate finance solutions and alternatives to our clients that serve their needs and respond to changing market dynamics.”

Shokry Bidair, CFO of valU also commented on the issuance saying, “We’re very excited to be closing the second issuance in our EGP 2 billion securitization program. This comes as a testament to the strength of our business model as well as our ability to tap into the debt capital market space despite ongoing economic challenges. This transaction will enable valU to further enhance its liquidity position and support the impressive growth it continues to achieve.”

EFG Hermes acted as the sole financial advisor, sole transaction manager and book-runner, underwriter, and arranger on the issuance. Arab African International Bank acted as underwriter and custodian, Dreny & Partners acted as the legal advisor, and KPMG as the auditor of the transaction.

The issuance follows the Firm’s conclusion of a series of transactions in 2022 involving advisory on Pioneers Properties for Urban Development second securitization issuance, Bedaya Mortgage Finance’s first securitization issuance, a securitization issuance for MNHD, and the sixth issuance for Premium International for Credit Services. It also comes on the heels of the Firm’s successful advisory on valU’s first securitized bond offering, worth EGP 322.5 million, in September 2021.