EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), announced today that its Investment Banking Division has successfully completed the Egyptian market’s first short-term bond transaction. The issuance follows the publication by the Financial Regulatory Authority (FRA) of Decision No. 172-2018 regarding the rules and procedures for the issuance of short-term debt instruments. The transaction saw EFG Hermes Investment Banking arrange the issuance of EGP 400 million, representing the first tranche of the EGP 2 billion bond, which was originated by EFG Hermes’ subsidiary Hermes Securities Brokerage (HSB).

Commenting on the issuance, Mostafa Gad, Co-Head of Investment Banking at EFG Hermes, said, “This transaction marks the debut flotation of a short-term bond on the Egyptian market, a major milestone since the Financial Regulatory Authority issued its decree regarding the procedures for the issuance of short-term debt instruments. The bond is part and parcel of our strategy for broadening and deepening EFG Hermes’ footprint in Egypt’s developing debt capital markets space, parallel to expanding our operations in Frontier Emerging Markets.”

“The FRA’s constant efforts to introduce new regulatory measures are designed to deepen the Egyptian capital markets, particularly in the area of non-bank financial instruments,” he continued.

“The issuance generated very strong demand from a broad array of domestic institutional investors and drew the participation of an international financial institution in the issuance of a short-term bond for the very first time, an important milestone for the Egyptian market,” added Gad.

“HSB’s landmark issuance comes on the back of the Investment Banking Division’s successful completion of a short-term securitization transaction backed by customer credit portfolios at Premium International. This previous issuance was similarly pathbreaking in that it was the first of its kind in the industry, in addition to its innovative tenor profile. Our intensive efforts in this space clearly illustrate the initiative EFG Hermes is taking to further the modernization of the market in the wake of encouraging regulatory developments,” concluded Gad.

EFG Hermes acted as the sole financial adviser and sole arranger on the transaction. Zulficar & Partners acted as legal adviser and KPMG acted as financial auditor on the transaction.​