The second issuance is part of the EGP 2 billion program launched in December 2019, and was 1.3x oversubscribed by a wide group of investors.

EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), announced today that its Investment Banking Division has successfully completed the closure of an EGP 500 million short-term bond issuance for HSB (a subsidiary of EFG Hermes).
The transaction saw the Investment Banking Division arrange the issuance of EGP 500 million, representing the second tranche of the EGP 2 billion bond, which was originated Hermes Securities Brokerage (a subsidiary of EFG Hermes). The issuance comes as part of the EGP 2 billion short-term bond transaction; Egypt’s first short-term bond transaction following 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. 

Commenting on the issuance, Mostafa Gad, Co-Head of Investment Banking at EFG Hermes, said, “This transaction continues the momentum of our fast-rowing debt capital markets (DCM) franchise, coming as the ninth consecutive deal in 2020. The team has advised on debt arrangement, securitization transactions, and Sukuk issuances to different clients spanning multiple industries in Egypt.”

“The issuance generated very strong demand from a broad array of domestic Egyptian corporates, with the issuance being 1.3x oversubscribed without the participation of local banks, the traditional go-to investors for similar issuances. This not only reflects the growing demand for newly-introduced financial instruments in the domestic market, but also opens the door for local companies to find alternate solutions to support their treasury management,” added Gad.

“This issuance is part of an EGP 2 billion program that it is the first of its kind in the industry, in addition to having an innovative tenor profile. Our intensive efforts in this space clearly illustrate the initiative EFG Hermes is taking to take advantage of the modernization of the market in the wake of encouraging regulatory developments,” concluded Gad.

EFG Hermes acted as the sole financial adviser on the transaction. EFG Hermes and Misr Capital acted as underwriters, Zulficar & Partners acted as legal adviser and KPMG acted as financial auditor on the transaction.