Palm Hills Developments (PHD) and Sarwa Capital for financial investments, announce the closing of the latest securitisation bond backed by a receivables portfolio of EGP776m, as part of the company’s plans to deleverage its balance sheet via monetisation of receivables associated with handed-over residential units.
Said receivables portfolio include 582 delivered units in the following projects: Golf Views, Golf Extension, Woodville, Cascade, Palm Valley, Palm Parks, Village Gate, Hacienda Bay, Hacienda White 2, Palm Hills Katameya, and Palm Hills Katameya Extension.
The three tranches received ratings of AA+, AA, and A by Middle East Ratings and Investors Service (MERIS). The transaction’s net proceeds will be mainly utilised in the settlement of existing debt.
The Bond was issued by Sarwa Securitisation Company, bringing PHD’s total issuances to EGP2.4bn to date, representing the largest pool in the market. Sarwa Promotion & Underwriting acted as structuring advisor, lead manager, and arranger of the transaction. The issuance was fully underwritten and co-arranged by Banque Misr, Arab African International Bank, and the Ahli United Bank, while Arab Legal Consultants acted as legal advisors for the transaction.
PHD’s Chairman & Group CEO Yasseen Mansour said, “We started the securitisation programme more than two years ago and I am pleased with the conclusion of the fourth transaction. We will use the bulk of said transaction proceeds to settle some of our existing debt. We expect to engage in further securitisation transactions in 2020 with gross receivables portfolio of up to c.EGP1.5bn, which will be mostly directed towards debt settlement.”
“With the existing debt balance being settled gradually, we are in discussions with a number of local and foreign lending institutions regarding the long term financing of Badya in the range of c.EGP1.5bn-2bn, whereby we plan to maintain our current net debt position and leverage ratio,” he added.