Souhoola Raises EGP 883 Million Through Third Securitization as Consumer Finance Portfolio Expands
BM Consumer Finance, known as Souhoola, has completed its third securitized bond issuance worth EGP 883 million, turning part of its consumer finance receivables into fresh liquidity as the company looks to fund further portfolio growth without relying solely on traditional borrowing.
The transaction is backed by an assigned receivables portfolio worth EGP 1.05 billion, meaning the securitized bonds represent around 84% of the underlying portfolio’s value. The deal also marks an increase in size compared with Souhoola’s previous issuance, reflecting the expansion of the financing portfolio available for securitization.
The latest transaction demonstrates how securitization is becoming an increasingly important funding mechanism for Egypt’s non-bank lenders, allowing consumer finance companies to recycle existing receivables into liquidity that can be deployed into new financing.
Two tranches with maturities of up to 22 months
The EGP 883 million issuance is divided into two tranches.
The first and largest tranche is valued at EGP 700 million with a 12-month maturity and received a Prime 1 rating from Middle East Ratings and Investors Service (MERIS), representing its highest short-term credit rating.
The second tranche is worth EGP 183 million, carries a 22-month maturity and received an A- credit rating.
The ratings provide an important measure for investors evaluating the quality of the receivables backing the transaction and their expected ability to generate the cash flows required to repay the bonds.
Securitization gives Souhoola more room to lend
For Souhoola, the transaction effectively converts more than EGP 1 billion of existing consumer finance receivables into a new source of funding.
Rather than waiting for customers to repay those receivables over their original financing periods, securitization allows the company to monetize part of the portfolio earlier and redeploy the resulting liquidity.
That model can become increasingly important as consumer finance companies scale, since growth requires a continuous supply of funding to originate new financing while existing customer balances remain outstanding.
Ahmed El-Shenawy, Managing Director of BM Consumer Finance – Souhoola, said the third issuance supports the company’s expansion plans and its ability to meet growing customer demand.
He said the increase in the transaction’s value compared with the previous issuance reflects continued growth in the size and quality of Souhoola’s portfolio, while strengthening the company’s funding base.
Souhoola plans to continue expanding its customer base and financing portfolio while developing more flexible financing solutions.
Diversifying funding as the portfolio grows
Fady Elias, Chief Financial Officer of Souhoola, said diversifying funding sources is a central part of the company’s growth strategy and provides greater capacity to expand while maintaining a balanced funding structure.
He also pointed to the credit ratings received by the two tranches as an indication of the quality of the underlying portfolio.
The deal is therefore not simply a capital markets transaction for Souhoola. It creates a funding cycle in which receivables generated through consumer financing can be packaged into securities, sold to investors and converted into liquidity that can support another round of financing.
CI Capital and Al Ahly Pharos arrange the transaction
CI Capital and Al Ahly Pharos acted as financial advisers, arrangers, general coordinators, issuance managers and placement agents for the transaction.
Amr El Hilaly, CEO of Sell-Side Investment Banking at CI Capital, said the transaction adds another issuance to the firm’s debt capital markets track record, while Mohamed Abbas, Head of Debt Capital Markets at CI Capital, said the deal represents another stage in Souhoola’s issuance program.
Ahmed Heider, CEO of Al Ahly Pharos Investment Banking, said the transaction provides Souhoola with liquidity to expand its financing portfolio and customer base.
Ahmed Ayman, Head of Debt Capital Markets at Al Ahly Pharos, highlighted securitization’s role in allowing consumer finance companies to convert portfolios into liquidity that can subsequently finance new lending.
Baker Tilly acted as financial auditor, while Matouk Bassiouny & Hennawy served as legal counsel.
With its third securitization completed, Souhoola is increasingly using the debt capital markets as part of its funding model. The EGP 883 million transaction illustrates the mechanism clearly: existing consumer finance receivables are being recycled into fresh liquidity to finance the company’s next stage of growth.