EFG Hermes, the leading financial services corporation in Frontier Emerging Markets (FEM), announced today that it has successfully concluded an EGP 2 bn Sukuk issuance, the first in the history of Egypt – to the Arab Company for Projects and Urban Development. The Sharia-compliance Sukuk will be tradeable on EGX, subject to early redemption at the option of the borrower, and is non-convertible to shares with a tenor of 5 years. Both the Arab Company for Projects and Under Development and the Sukuk received an (A+) rating with a stable outlook by the Middle East Ratings and Investor Services (MERIS).

In addition to being the first Sukuk issuance in Egypt, it is also the largest EGP-denominated private sector corporate debt issuance in the Egyptian capital markets history. EFG Hermes has acted as sole financial advisor, sole global coordinator, sole lead arranger and sole bookrunner and underwriter. While EFG Hermes Sukuk S.A.E. acted as the originator / issuer. The Sukuk, which is based on an Ijarah structure and will be listed on the EGX, has generated substantial participation interest allowing to close the subscription period on April 9th 2020 (only one day following the opening of subscription).

Maged El-Ayouti, deputy head of investment banking at EFG Hermes noted, “I am proud of the team’s ability to initiate and conclude the first Sukuk issuance coming out of Egypt, and especially amidst the challenges presented by novel COVID-19 Corona virus. This success is a testament to the ability of the team to source, execute and conclude deals under adverse circumstances across our markets of operation.”

El-Ayouti also commended the FRA’s role of constantly adding depth to the Egyptian capital market through its issuance of laws, rules and regulations, noting that the FRA’s has played a pivotal role in the introduction new innovative financial products.

“We are pleased with our continued partnership with Talaat Mostafa Group, as this concludes our fourth advisory transaction to the group in less than three years; a testament to our strong, sustainable relationships with our clients that allow us to achieve mutual success on both short and long terms,” he added.

Mostafa Gad, Co-head of investment banking at EFG Hermes stated, “Our strategy to launch an independent debt capital markets (DCM) team within the division has proven a success, with new deals sourced across our footprint that generated a new stream of revenues mitigating the slowdown across MENA and global capital markets in general. Recently, the Division has also issued EGP 400 mn short-term bonds to Hermes Securities Brokerage in addition to EGP 167 million short-term securitization bonds to Premium International – both deals introduced for the first time ever in the history of Egyptian capital markets.”