Palm Hills Developments (PHD) and Sarwa Capital announced the closing of the latest and fourth securitization bond backed by a receivables portfolio worth of EGP 776 mn, Invest-Gate reports.
The transaction comes as part of the developer’s plans to deleverage its balance sheet via monetization of receivables associated with handed-over residential units, with the net proceeds to be mainly utilized in the settlement of existing debt, according to an official statement published on October 22.
The receivables portfolio includes 582 delivered units in 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 bond was issued by Sarwa Securitization Company, bringing PHD’s total issuances to EGP 2.4 bn to date, representing the largest pool in the market, according to the statement.
Sarwa Promotion and 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 (AAIB), and Ahli United Bank (AUB), while Arab Legal Consultants was assigned as a legal advisor for the transaction.
Commenting on the transaction, PHD’s Chairman and Group CEO Yasseen Mansour said, “We started the securitization program 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 securitization transactions in 2020 with a gross receivables portfolio of up to [around] EGP 1.5 bn, which will be mostly directed towards debt settlement.”
“With 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.EGP1.5-2 bn, whereby we plan to maintain our current net debt position and leverage ratio,” he noted.