EFG Hermes Corp-Solutions, the investment banking division of Egyptian financial group Hermes Holding (EFG Hermes), a leading Cairo-based financial services group led by Egyptian businessman Karim Awad, has completed an EGP500-million ($26.8 million) bond issuance as part of a coordinated effort to fund its operations and key working capital requirements.
The $26.8-million debt issuance, which aligns with the group’s strategic expansion plans, is the first transaction under the management-created EGP3 billion ($160.7 million) bond program.
This comes nearly three weeks after Karim Awad’s financial services group received shareholder approval to increase its capital base by EGP973.07 million ($52.9 million) via a bonus share distribution.
The bond, which has a credit rating of “A-” from Middle East Ratings and Investor Services (MERIS), is divided into two tranches, A and B, worth EGP450 million ($24.1 million) and EGP50 million ($2.7 million), respectively, and has a tenor of 24 months.
The issuance, according to Talal El-Ayat, CEO of EFG Hermes Corp-Solutions, is part of its strategy to deepen its market presence, as the capital injection into its operations will allow it to finance operational growth targets and execute its plans to expand and diversify leasing and factoring service offerings to reach a wider segment of clients looking for alternative sources of corporate financing.
According to Maie Hamdy, managing director of debt capital markets at EFG Hermes, the recent move comes as bonds across the globe are recovering as investors return to fixed-income assets.
“With the (Central Bank of Egypt) CBE raising interest rates to combat inflationary pressures, the demand for alternative corporate financing solutions in our home market is growing in lockstep,” Hamdy said.
EFG Hermes Holding is a financial services conglomerate with operations in the Middle East, North Africa, Sub-Saharan Africa, and South Asia.
Under the leadership of Awad, the group CEO since 2013, it has secured leadership positions in securities brokerage, asset management, investment banking, private equity, and research.
EFG Hermes reported a profit of EGP448.1 million ($24 million) in the first quarter of 2022, representing a 43.50-percent increase over the EGP312.13 million ($17.34 million) reported in the first quarter of 2021.