EFG Hermes, the financial services corporation in Frontier Emerging Markets (FEM), has announced that it successfully closed valU’s first securitization issuance worth EGP 322.55m, as part of a broader EGP 2bn securitization programme approved by the Financial Regulatory Authority (FRA) on 25 July 2021.
The bond is backed by a receivables portfolio of EGP 369m assigned to EFG Hermes as the issuance’s special purpose vehicle (SPV). The issuance received a Prime-1 rating, the highest among other Egyptian bond issuances according to Middle East Rating Services (MERIS).
Commenting on the issuance, Mostafa Gad, Co-Head of Investment Banking at EFG Hermes said: “We are proud to be embarking on this first-of-its-kind securitization program for a Buy-Now, Pay-Later (BNPL) fintech platform such as valU — a cornerstone of the EFG Hermes NBFI platform. Having garnered significant interest from financial providers, the transaction’s success also highlights our team’s dedication to diversify our service offering in the debt space and to continue to drive growth for the Firm and the clients we serve.”
EFG Hermes’ Non-Bank Financial Institutions (NBFI) platform CEO Walid Hassouna commented, “The transaction comes at a key juncture for the company, where value-added services such as instalment programmes and fintech-enabled consumer finance facilities are in high demand. As Egypt’s leading Buy-Now, Pay-Later (BNPL) fintech platform, valU has made tremendous strides in the years since inception, and we are thrilled to see it taking these kinds of strategic steps forward in its growth story.”
EFG Hermes acted as the sole financial advisor, sole transaction manager and book-runner, underwriter, and arranger on the issuance. Meanwhile, Suez Canal Bank and AAIB acted as underwriters, AAIB acted as custodian, Dreny & Partners legal advisor, and KPMG as auditor of the transaction.
