Misr Italia Properties The First Non-listed Real Estate Developer To Issue Securitization Through EFG Hermes

Misr Italia Properties, the leading Egyptian real estate developer, and EFG Hermes’ investment banking division, the leading investment banking franchise in Frontier Emerging Markets (FEM), announced the close of the first issuance, worth EGP 794 million, in an EGP 2.5 billion securitization program. The bond is backed by a receivables portfolio of around EGP 1 billion originated by two Misr Italia Holding subsidiaries.

The bond is comprised of three tranches, with the first divided into fixed installments and the second and third to be disbursed based on the proceeds of the portfolio. Tranche A is valued at EGP 214.3 million, with a tenor of 13 months, a credit rating of AA+ from Middle East Ratings and Investors Service (MERIS), and a fixed coupon rate of 9.60%. Tranche B is valued at EGP 420.8 million, with a tenor of three years, a credit rating of AA from MERIS, and a fixed coupon rate of 9.95%. Finally, tranche C is valued at EGP 158.8 million, with a tenor of five years, a credit rating of A from MERIS, and a fixed coupon rate of 10.20%.

Mohamed Hany El Assal, CEO and Managing Director of Misr Italia Properties, commented on the partnership saying, “we pride ourselves on being the first non-listed real estate developer to issue securitized bonds through EFG Hermes. We are honored to have a long-term partnership with EFG Hermes, which is vital to the growth of the company’s portfolio according to our ambitious expansion plans. This issuance will reflect positively on the financial statements of the company and will contribute to our commitment toward our clients for the timely delivery of units.”

“The company went through a rigorous operational review process by Moody’s subsidiary, MERIS, and received a very strong credit rating that we are proud of. This is the result of a very solid corporate governance and the hard work of a top-notch executive and management teams.”, according to Mohamed Khaled El Assal, CEO & Managing Director of Misr Italia Properties.

Commenting on the issuance, Mostafa Gad, Co-Head of Investment Banking at EFG Hermes said: “The transaction was met with widespread interest from investors, capitalizing on our strength in the DCM space to continue generating value for our partners and clients through flexible, alternative financial solutions. It is also part and parcel of our commitment to capitalize on the synergies inherent in our business model, with Misr Italia Properties having signed in October a sale and leaseback agreement with EFG Hermes Corp-Solutions and a home improvement financing arrangement for its clients through the Firm’s Buy-Now Pay-Later (BNPL) fintech platform, valU, in November.”

This collaboration marks another milestone in the long-term partnership between Misr Italia Properties and EFG Hermes. Last November, MIP signed an agreement with valU, the leading buy now pay later (BNPL) platform and a subsidiary of EFG Hermes, to provide MIP’s clients with financing programs to cover finishing and furnishing expenses. Additionally, MIP and EFG Hermes signed a sale and leaseback agreement worth EGP 750 million last October to refinance its flagship commercial project in New Cairo.

EFG Hermes acted as the sole financial advisor, transaction manager, book-runner, underwriter, and arranger on the issuance. Arab Investment Bank (aiBANK) participated in this transaction alongside the Commercial International Bank (CIB), Banque du Caire (BDC), National Bank of Egypt (NBE), and Suez Bank.