Egypt to approve issuance of 11 securitization bonds worth LE11.5B

CAIRO - 26 December 2021: 11 issuances of securitization bonds are on the way to obtaining the approval of the Financial Regulatory Authority (FRA)  this week, with a total value of about LE 11.5 billion, according to head of the FRA Mohamed Omran.

Omran stated that their financing portfolios vary between real estate financing, financial leasing, and consumer financing.

He added in a statement, Sunday, that the censor supports the positive trend of the activity of the Egyptian capital market to seek, with steady steps, to further issue bonds of all kinds to become an attractive market for this tool, as the year 2021 witnessed - for the first time - the study of 26 bond issuance files with a total value of LE 21.5 billion; 15 of them have already obtained the approval of the authority, with a value of more than LE 10 billion in various financing activities, including the first issuance of green bonds for companies worth $100 million, equivalent to LE 1.5 billion.

The Chairman of the FRA stressed that the approvals issued for corporate bonds and securitization bonds are consistent with the Authority’s comprehensive strategy for non-banking financial activities (2018-2022), which seeks to provide various sources of financing to the entities licensed to engage in real estate financing, consumer financing and financial leasing activities, and factoring and microfinance in order to achieve integration between non-banking financial activities subject to the supervision of the Authority.

Omran noted that with the remarkable development witnessed by the annual indicators of bonds, which began in 2019, following the amendments that were made to the Capital Market Law No. 95 of 1992 and its executive regulations, which led to the recovery of the bond market to provide an alternative for companies to provide the necessary financing for them. 

The number of issues reached 19 in 2019 with a value of more than LE 22 billion, compared to only LE 5.3 billion in 2018, while during 2020, 17 issuances of bonds were approved, with a value of LE 24.8 billion, and it is expected that during 2022 the number of securitization bond issues will increase after  the approval of the legislative amendment on securitization of future financial rights.

During  2021, the transferred portfolios - which were securitized - concentrated in the financial leasing activity by 54 percent of the total securitization bonds issued during the current year, and the real estate finance portfolios grabbed 34 percent of the volume of securitization and the consumer finance portfolios got 12 percent.