valU Closes 10th Securitized Bond Issuance at $25M, Marking a Milestone for Fintech in MENA
valU, a leading fintech startup in the Middle East and North Africa (MENA), has today announced the successful closing of its 10th securitized bond issuance, valued at $25 million (EGP 1.2 billion). This issuance is part of an extended securitization program worth EGP 9.0 billion and signifies a significant milestone for both valU and the broader financial landscape in the MENA region.
The bond, backed by a receivables portfolio assigned to EFG for securitization, the issuance’s special purpose vehicle (SPV), is divided into two tranches. Tranche A is valued at EGP 691.6 million, with a six-month bond tenor and a Prime 1 (SF) rating at a fixed interest rate. Tranche B is valued at EGP 461.0 million, with a 12-month bond tenor and a Prime 2 (SF) rating, also at a fixed interest rate. This issuance follows closely on the heels of valU’s ninth securitized bond issuance, which raised $13.22 million (EGP 616.75 million) in May from Arab Banking Corporation (ABC) and Al Ahli Bank of Kuwait (ABK).
Shokry Bidair, CFO of valU, commented on the new investment, stating, “This milestone marks a significant step in our growth journey, showcasing our ability to leverage a variety of financial instruments to fuel our expansion. The success of this issuance reflects the market’s confidence in valU’s robust business model and our commitment to maintaining high standards of transparency and financial integrity. We remain dedicated to offering innovative financial solutions that meet the evolving needs of our customers, and this latest securitization will enable us to further diversify our product offerings and enhance our service delivery.”
The successful issuance underscores ValU’s role in revolutionizing the financial landscape in Egypt. With cutting-edge offerings such as the BNPL platform ‘U,’ along with a range of investment products like the AZ Valu fund and EFG Hermes ONE, valU is empowering millions of consumers to achieve their financial goals. The company continues to innovate with solutions like the instant cash redemption program Sha2labaz, the savings solution Akeed, and the luxury financing program Ulter.
Moreover, valU has recently expanded its product range through a partnership with Visa, launching a co-branded credit card and prepaid card. This move aims to provide greater financial flexibility and convenience to customers, further cementing valU’s position as a leading fintech innovator in the region.
Maie Hamdy, Managing Director of Debt Capital Markets at EFG Hermes, highlighted the importance of this achievement, stating, “The successful conclusion of this 10th issuance for valU is a testament to the strength of the partnership between EFG Hermes and valU. It highlights valU’s innovative approach and sound financial management, which have enabled the company to access the capital markets and raise funds to support its growth. At EFG Hermes, we are proud to support initiatives that drive economic growth and provide our partners with attractive opportunities.”
The collaboration between valU and EFG Hermes, which served as the sole financial advisor, transaction manager, bookrunner, underwriter, and arranger, underscores the critical role of strategic partnerships in navigating and capitalizing on the evolving financial landscape. The Arab African International Bank (AAIB) acted as the issuance’s underwriter and custodian bank, while Arab Banking Corporation (ABC) was one of the subscribers. Legal and auditing support was provided by Dreny & Partners and Baker Tilly, respectively.
This 10th bond issuance not only bolsters valU’s growth trajectory but also highlights the broader trend of fintech innovation in the MENA region. By successfully leveraging securitization, valU is setting a precedent for other fintech firms, illustrating how sophisticated financial instruments can be used to drive expansion and innovation. This development is a positive indicator for the future of fintech in MENA, signaling a robust and growing market that is increasingly attractive to both regional and international investors.