For tourism companies… Issuing “bonds” is a financing solution for the establishment and development of hotels

The Financial Supervisory Authority gives priority to providing financing solutions for tourism companies; To diversify their sources of financing necessary for the growth and development of their business and achieving their goals, including the issuance of bonds where tourism companies can obtain funding sources for them through the use of these bonds as follows:

1- Corporate Bonds:

Tourism companies can issue bonds to finance their needs and provide the liquidity required to complete their activities or carry out expansions of their activities in terms of purchasing tourist buses, hotel equipment, tourist buildings or floating hotels, or making expansions and renovations to existing hotel facilities.

2- Securitization of future financial rights:

Tourist companies, if they have financial rights and deferred dues at future time periods, can transfer the portfolio of future financial rights owed to the company from their clients to one of the securitization companies licensed to practice the activity from the authority to issue securitization bonds in exchange for that referred portfolio.

The company obtains in return for that transfer, which enables it to recover the funds invested in those portfolios and recycle them in the same activity or other activities, which provides current liquidity for the company instead of waiting for the creditors of the tourism companies to pay the debts owed by them at future periods.

3- Future financial rights securitization bonds

The Financial Supervisory Authority is currently working on adopting and issuing the necessary executive decisions to activate it. Through the issuance of Law No. 13 of 2022 amending some provisions of the capital market No. 95 of 1992 regarding the addition of future cash flow securitization bonds, it became possible for tourism companies to transmit cash flows In the future (expected to be owed within a specified period) to the securitization company to issue securitization bonds in return for which tourism companies can use that amount of bonds for the purposes of expanding the provision of services and projects for the company.

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