Egypt’s FRA to okay 11 new securitised bonds with total value of 11.5 bln before end-2021

Doaa A.Moneim , Sunday 26 Dec 2021

Egypt’s Financial Regulatory Authority (FRA) is set to greenlight 11 securitised bonds, out of 26, before end of 2021 with a total value of EGP 11.5 billion, whose portfolios mainly centred on mortgage, consuming and leasing financing, Chairman of FRA Mohamed Omran stated on Sunday.

Chairman of FRA Mohamed Omran
Chairman of FRA Mohamed Omran. Al-Ahram

Securitised bonds is a widespread way that exists in the Egyptian market, which focuses on debt financing; particularly in real estate and consumer finance firms, backed by a portfolio of financial assets.

During 2021, FRA approved 15 securitised bonds with a total value exceeding 10 billion in various financing activities, according to Omran.

Leasing finance companies acquired 54 percent of the approved securitised bonds, mortgage companies accounted for 34 percent, while consuming financing companies represented 12 percent of the approved bonds, Omran explained.

On the other hand, FRA has finalised the procedures of registering three new companies with a total fair value surpassing EGP 5 billion, which clears the way for these companies to be listed in Egypt’s Stock Exchange (EGX) before end-2021, according to Omran.

One of those companies operate in healthcare sector, another one works in agri-business and environment services, while the remaining one specialised in contracting field.

“Such approvals come under FRA’s strategy for the non-financial activities (2018-2022) that seeks providing a variety of financing resources for the already-registered companies that work in mortgage, leasing and consuming finance, in addition to the companies that practice the micro-financing activity,” said Omran.

He also pointed out to the recent amendments to Egypt’s capital market law no 95 for 1992 that contributed to freshening up bonds market in Egypt.

In November, FRA approved a draft amendment to a number of the rules governing bonds, securitized bonds, and sukuk in the domestic capital market.

The amendment added up four new financing instruments to be adopted in the capital market, including social bonds, sustainable development bonds, environmental social and governance bonds, and gender equality and women’s empowerment bonds.

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