Last Update 10:24
Tuesday, 22 October 2019

Egypt to allow unrated and covered bonds this summer: EFSA head

Unrated bonds allow small and medium-sized enterprises to access the bond market without going through long and expensive credit rating process

Deya Abaza , Tuesday 9 Jun 2015
Sherif Samy
Sherif Samy, chairman of the Egyptian Financial Supervisory Authority (Photo: AL-Ahram)
Views: 1699
Views: 1699

Egypt's government plans to allow the issuance of unrated bonds and covered bonds, Egypt's financial regulator head announced at a conference on Tuesday. 

The new debt instruments are expected to be approved sometime this summer, regulator head Sherif Samy told Ahram Online on the sideline of the Egyptian Stock Exchange's second annual conference on Tuesday.

Covered bonds are corporate debt securities backed by cash flows from mortgages or public sector loans. They are similar to asset-backed and mortgage-backed securities but the loans backing covered bonds remain on the balance sheet of the issuer, and therefore are believed to be safer because in case the issuer goes bankrupt, for instance, investors still have access to cover pool.

Unrated bonds allow small and medium-sized enterprises to access the bond market for expansion projects without going through the long and expensive credit rating process. 

Cash-strapped Egypt is depending on private sector investors to drive growth after years of political turmoil and economic stagnation. 

Part of that plan is to diversify the capital market, introducing new financial instruments for investors.

In January, Egypt approved the use of Exchange Traded Funds, securities that track an index of stocks. 

Short link:


Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

© 2010 Ahram Online.