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EMEA case study
HSBC awarded Best EMEA Securitisation Deal for landmark transaction in Egypt
HSBC Bank Egypt (HBEG) acted as joint lead arranger on the issuance of an EGP4.65 billion (USD830 million) asset-backed securitisation bond for Tameer Securitisation Company in June 2009.
This is an onshore special-purpose vehicle (SPV) established for the sole purpose of issuing an eight-year, single-tranche bond. It was a landmark transaction for several reasons. The notes represented the first securitisation bond to be issued by a government authority. It was also the largest bond issue ever in Egypt, reinforcing HSBC's leadership in the Egyptian market.
A first for the country
This is the first time that HSBC has acted as trustee for a securitisation transaction in Egypt. The trustee has different responsibilities under Egyptian law, including the management of all cash inflows and outflows in relation to the securitised asset such as coupon payment, principal payment and investing any credit balances from collections on behalf of bondholders. From the Bank's point of view, providing trustee services for securitisation transactions supports the ongoing relationship between the Bank and the client. This will also help us to offer more integrated services to other clients in the future.
Building a stronger relationship
The deal was well-received, with lead arrangers receiving around 40 subscribers for the bond issue. Most of these were banks, while the rest were non-bank financial institutions such as insurance companies and various funds. The structure fitted in with the banks' search for secure investment vehicles during the current economic turmoil.
A direct reflection of our success in managing this issue has seen us being mandated, by the Ministry of Finance, to lead arrange a direct bond issue for NUCA with a total issue size of EGP5 billion (USD910 million). The success of the issue in difficult market conditions enhanced the relationship between HBSC and the government of Egypt. The transaction was awarded Best EMEA Securitisation Deal 2009 by emeafinance.
