EFG Hermes closed a EGP 900 mn senior unsecured short-term note issuance for Hermes Securities Brokerage (HSB), its wholly owned brokerage arm. The 12-month bond comes with a floating interest rate, and is the sixth issuance by HSB and the first under a newly approved EGP 3 bn program, the investment bank said in a statement (pdf).

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While the note is unsecured, the issuer’s strong credit rating provides reassurance to investors, signaling low risk and supporting market appetite for the transaction. HSB has a long-term senior unsecured rating of BBB+ with a positive outlook and a P2 short-term rating, both affirmed by local ratings agency MERIS.

The details: The buyers were mainly asset manager funds, and the proceeds are earmarked to finance company operations. Meanwhile, the note’s variable interest rate is benchmarked against the one-year T-bill net of tax.

What they said: “This issuance is a testament to our ongoing commitment to fostering sustainable growth within Egypt's financial markets as we continue to deliver innovative financing solutions and attract substantial demand from an investor base in such issuances beyond commercial banks,” said Maged El Ayouti, co-head of investment banking at EFG Hermes.

ADVISORS- EFG Hermes played multiple roles on the issuance, acting as the sole financial advisor, transaction manager, bookrunner, underwriter, and arranger. CIB served as the placement and subscription bank, while counsel was provided by Dreny & Partners. KPMG acted as the auditor.

The bigger picture: The transaction adds to a busy year for EFG Hermes’ debt team. Recent mandates include Bedaya’s sixth securitized issuance (EGP 1.6 bn), Valu’s (EGP 463.3 mn) securitization, and Sylndr’s EGP 370 mn working capital facility. EFG also advised on a EGP 450 mn issuance for its leasing and factoring subsidiary EFG Corp-Solutions.

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