Recent Developments
The Amendments ("Amendments") to the Covered Bonds Communiqué No. III-59.1 ("Communiqué") entered into force through their publication in the Official Gazette dated May 14, 2020 and No. 31127.
What's New?
The significant Amendments to the Communiqué include the following:
- The restriction stipulating that the nominal value of the covered bonds ("CB") in circulation issued by the Mortgage Finance Institution ("MFI") shall not exceed five times the MFI's equity amount stated in the audited financial statements of the last accounting period is now removed.
- In issuances to be made by MFIs, 50% of the rates set forth in the Communiqué applicable to the fees payable to the Capital Markets Board ("CMB") for CB issuance will apply.
- The CMB fee rates set forth in the Communiqué will be applied as zero per thousand until December 31, 2021.
Conclusion
The Amendments are incentivizing MFIs to issue CBs.
Originally published 22 May 2020
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