Sarwa Capital for consumer
and structured financial services has successfully closed its inaugural Sukuk
issuance by Sarwa Sukuk, a subsidiary of Sarwa Capital, of EGP 2.5bn. The
issuance is a Shariah compliant 7-year Mudarabah Sukuk and received a high
credit rating of A- by the Middle East Ratings and Investors Service (MERIS).
The proceeds will be used
for further expansion of Contact Credit and its affiliate companies.
This issue is the first
transaction of its kind and the largest Sukuk issuance in Egypt.
The landmark issuance
underlines the group’s strong financial position and its ability to diversify
its funding sources to capture growth opportunities and solidifies its
strategic position in developing innovative financing structures in the
Egyptian debt capital market.
Sarwa has always been a
pioneer in offering innovative financial solutions and the leading private
issuer of corporate debt instruments in Egypt with total bond issuances
reaching over EGP 23bn to date through 30 issuances.
This transaction comes as a
result of a combined effort from reputable banks, financial institutions, and
the Financial Regulatory Authority (FRA) which showed strong support during the
process.
Sarwa Sukuk was the first to
obtain Sukuk license in Egypt by the FRA in July 2019.
The issuance closed with
strong demand from a wide range of investors reflecting the strong track record
of Sarwa in the debt market. Sarwa Promotion and Underwriting acted as lead
manager and arranger on the transaction. Banque Misr and Misr Capital acted as
underwriters.
The transaction was
co-underwritten by Commercial International Bank and Ahli United Bank.
Alieldean Weshahi & Partners (ALC) acted as the legal advisor while Elite
Consulting Group acted as the independent financial consultant on the
transaction.
Ayman El Sawy, Group Chief
Financial Officer at Sarwa, commented, “We are extremely proud to complete the
inaugural Sukuk issuance for Sarwa Capital and the largest in the Egyptian
capital markets. The success of this landmark transaction marks a new phase in
diversifying the group’s funding sources to cater for future growth. The Suku
issue is the first of a number of new tools to be launched and comes on the
back of our strong track record in the securitization bond market. We hope
these will act as a model for alternative funding structures in Egypt.”