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 The Board of Directors of U for Consumer Finance (Valu) has approved the launch of the first issuance under the company's bond program, with a total value of EGP 1 billion. The issuance will be offered in two tranches over a 36-month period, according to a disclosure submitted to the Egyptian Exchange (EGX).

Tranche A Details

The company detailed that the first tranche (Tranche A) consists of tradable, non-convertible, and non-callable nominal bonds valued at EGP 460 million, with a nominal value of EGP 100 per bond and a 13-month maturity. This tranche carries a fixed annual yield of 20.75%, calculated from the day following the closure of the subscription period.

The first coupon will be disbursed starting the fourth month, followed by quarterly payments until the end of the tranche's lifespan. The repayment of the principal for Tranche A will also commence after four months, continuing on a quarterly basis.

These bonds rank pari passu (equally in priority of payment and guarantee) with the issuer's current and future financial debts, excluding legally privileged privileges and secured loans outlined in the memorandum, in accordance with the Financial Regulatory Authority (FRA) Board Decree No. 54 of 2014.

Tranche B Details

Furthermore, the board approved the offering of the second tranche (Tranche B), which comprises tradable, non-convertible, and non-callable nominal bonds totaling EGP 540 million, with a nominal value of EGP 100 per bond and a 36-month maturity.

This tranche features a variable annual yield equivalent to the average Corridor rate announced by the Central Bank of Egypt (CBE), plus a margin of 1.00%. Similar to the first tranche, the yield will be calculated starting the day after the subscription closes.

The first coupon for Tranche B will be paid starting the fourth month, followed by quarterly payments. However, the principal of Tranche B bonds will be amortized quarterly only after the full redemption of Tranche A. These bonds also hold an equal priority of payment and guarantee status under the same FRA regulatory guidelines.

Delegation of Executive Authority

During the meeting, the Board of Directors authorized Walid Hassouna, Chief Executive Officer, or Karim Riad, Chief Financial Officer, to act individually in taking all necessary procedures and signing all documents and contracts required to finalize the company's bond issuance under the first program.

This delegation of authority includes making any necessary amendments to the private placement memorandum—specifically determining the final yield rate for the issuance, or postponing or entirely canceling the offering based on prevailing market conditions. It also grants them the authority to approve the final private placement memorandum upon which the execution will be based.