The Financial Regulatory Authority (FRA) approved on Saturday three issuances of securitisation bonds with a total value of EGP 23bn distributed among three companies, of which only one issuance — with a value of about EGP 20bn — is the largest so far.
The recent period has witnessed an increase in the demand of public economic entities in various activities to diversify the sources of funding for their expansions to raise the efficiency of their operations.
This is evident in the steady rise in the values of securitisation bonds and sukuk issuances, as well as other forms of financing provided by non-banking financial markets through the activities the FRA monitors for the safety and stability of its dealings.
The value of the first issuance is EGP 20bn, which is the largest volume of securitisation bonds ever since the regulation of the practice of securitisation operations.
This is the seventh issuance of Tameer Securitisation for financial rights and deferred dues for “a real estate portfolio transferred from the New Urban Communities Authority (NUCA),” according to the FRA’s statement.
The authority also approved the second issue of the first programme for a securitisation company in exchange for a real estate financing portfolio transferred from a real estate financing company with a value of EGP 1.598bn, as well as the second issue of the first programme of Global Corp for securitisation in exchange for a financing lease portfolio transferred from Global Corp for Financial Services with a value of EGP 1.284bn.
FRA Chairperson Mohamed Farid said that the current stage is witnessing an increasing demand by economic entities operating in various productive activities for financing forms provided by non-banking financial activities, which reflects the importance of the non-banking financial sector, as it provides innovative financing solutions that take into account the needs of companies for growth and expansion.
Farid added that the authority is moving forward in adopting and implementing policies and action plans to develop and revitalise the capital market in an integrated manner, including debt instruments represented in corporate bonds, securitisation bonds for future financial rights, in addition to sukuk.
The aim is to deepen the stock market in a manner that is commensurate with the development of the authority’s comprehensive strategy for non-banking financial activities, which seeks to provide various financing solutions to entities licensed to practice real estate financing, consumer financing, financial leasing, factoring, and microfinance in a manner that achieves integration between non-banking financial activities subject to the authority’s supervision.
He added that these financial solutions are financing and investment tools for institutions and individuals, which requires the continuation of improving and developing the procedures for issuing these tools for their prominent role in financing companies, bodies, and public legal persons.
Moreover, Farid explained that allowing trading on them to be issued and registered in an orderly and legal manner encourages many individuals and institutions to consider it as one of the appropriate alternatives to access the necessary financing for growth and expansion, as well as for investment and savings.