Islam Azzam, VP of FRA, stated that the private offering of bonds will be divided into two tranches, and will support expanding investor base in terms of bonds
The Financial Regulatory Authority (FRA) is looking to increase public offerings and stimulating the bonds market in the Egyptian Exchange by requiring companies to offer no less than 10 percent of privately offered bonds for public buying.
Islam Azzam, vice president of the Financial Regulatory Authority (FRA), stated that the private offering of bonds will be divided into two tranches, and the new requirements will support expanding the investor base in terms of bonds.
The first tranche will represent 90 percent of the total bonds offered for private placement and allocated to individuals and companies, with the minimum subscription in private placement equaling 0.5 percent of the offering’s value or LE 1 million.
For high net worth individuals and financial institutions, this will be 1 percent of the offering’s value, or LE 10 million, whichever is less.
The second tranche represents 10 percent of the total bonds offered, and is excluded from the minimum subscription, according to the same rules of public offerings, with the aim of expanding the base of bondholders to stimulate trading in the secondary market.
Azzam also hinted the change may have come as a response to his meeting with some officials of bond issuers, investment banks and asset management companies in the Egyptian capital market to discuss their proposals regarding revitalization.
