Cairo – Mubasher: Palm Hills Developments (PHD) on Thursday announced the successful closure of its latest securitised bond issue with Sarwa Capital.

The closed bonds are part of an EGP 346 million ($19.6 million) receivables portfolio of 232 delivered units in PHD’s projects, namely: Palm Hills Katameya Extension, Palm Parks, and Hacienda White 2.

After applying a discount rate of 14.83% and deducting various transaction-related fees and commissions, Palm Hills will receive net proceeds of EGP 261 million ($14.79 million).

The Egyptian-listed developer plans to use the bond proceeds in pre-paying its existing debt, a statement showed Thursday.

The discount rate is calculated based on the average return of the bond's three tranches.

PHD CEO Tarek Rahman described the bond closure as a “milestone” that was in line with his company’s plans to “deleverage its balance sheet via monetisation of receivables programme of up to c. EGP 2.5 billion over 2 to 3 years.”

The receivables programme commenced in early 2017, he added.

Meanwhile, Sarwa Promoting & Underwriting's managing director Ayman El Sawy stated that he was pleased with the closing of the second securitisation bonds for PHD, noting that the bonds “maintain the same high credit rating on the back of the strength and quality of the issue structure.”

By 11:10 am Cairo time, Palm Hills’ stock dropped 4.02% on the Egyptian Exchange (EGX) to EGP 5.01.