Cairo – Mubasher: Premium International for Credit Services has concluded Egypt’s first short-term securitisation deal worth EGP 167 million, backed by a receivables portfolio valued at 184 million.

The bond, which includes a single ten-month tranche carrying a fixed coupon rate of 12.59%, received a “Prime 1 Rating”, the highest credit rating, by Middle East Ratings and Investor Services (MERIS), according to a statement.

EFG Hermes served as lead arranger, book-runner and underwriter of the transaction, while Arab African International Bank (AAIB) was selected as underwriter, placement agent, and custodian.

Dreny & Partners was chosen as legal adviser, while KPMG was the auditor for the deal.

A total of 50% of the offering was subscribed by AAIB, while the rest 50% were subscribed by a host of investment funds.

“This is the first tranche of Premium’s two-year program of issuing EGP 2 billion short-term securitised bonds, an attempt to diversify the financing sources and to off load [its] balance sheet through monetising EGP 2.5 billion worth of net present value of receivables associated with debt collection and consumer credit,” the founder and CEO of Premium International, Paul Antaki, remarked.

The proceeds from the deal will be used to enhance the consumer finance company’s short-term liquidity position, cement its financial position, and raise its borrowing limits with banks.

“EFG Hermes has taken the initiative to pave the way by issuing the first short-term securitisation transaction under the new [short-term debt instrument] 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,” co-head of investment banking at EFG Hermes, Mostafa Gad, noted.