EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), has announced today the successful closing of the first short term securitization transaction in Egypt, under the new Short Term Debt Instrument (or” STDI”) decree no. 172 of 2018.

Premium International for Credit Services (“Premium”, or the “Company”) is the originator who assigned a portfolio of EGP 184mn to EFG Hermes, the Securitization SPV, backed by the portfolios of Premium customer credit. The EGP 167 million bond, which consists of a single 10-month tranche, received a “Prime 1 Rating”, the strongest amongst other Egyptian bond issuances as quoted by Middle East Ratings and Investor Services (MERIS).

Premium launched in the Egyptian market in 2002, and currently stands as a leading entity in the consumer finance sector, with more than 120 thousand cardholders registered and access to more than 5000 stores across Cairo and Alexandria. Currently, the Company records more than 750 thousand transactions annually.

Commenting on the issuance, Mostafa Gad, Co-head of investment banking at EFG Hermes said, “EFG Hermes has taken the initiative to pave the way by issuing the first short-term securitization transaction under the new STDI decree. Not only is this issuance the first of its kind from a tenor perspective, but also the first in the consumer finance industry. Setting up an independent team dedicated to debt capital markets came to execute our strategy of diversifying our services in markets in which we already operate – parallel to our successful geographic expansion drive that has taken our world-class advisory services to newly-entered Frontier Emerging Markets.”

“We look forward to working closely with Premium with regards to the remaining issuances under the first short term program, approved by the FRA in October, amounting to a total of EGP 2 billion over a period of two years,” added Gad.

EFG Hermes is also in process of closing the first unsecured short-term note in the Egyptian market along with a new securitization transaction in the fourth quarter of 2019, notwithstanding several other securitization and bond issuances currently in the Investment Banking Division’s pipeline.

EFG Hermes acted as the sole financial advisor, sole arranger, and co-underwriter along with The Arab African International Bank, who is also the issuances’ custodian. Dreny & Partners acted as the Legal Advisor and KPMG acted as the Financial Auditor for the transaction.​