ADVOKS GLOBAL · KENYA
The Capital Markets (Asset-Backed Securities) Regulations
39. Credit enhancement
Edition: 2022-12-31 · In force
39. Credit enhancement
(1)An issuer may seek credit enhancement of the issue, which enhancement may be in the form of—(a)over-collateralization;(b)a standby letter of credit or line of credit issued by a bank or financial institution that is licensed by the Central Bank;(c)a guarantee by a bank or financial institution that is licensed by the Central Bank;(d)surety bond issued by an insurance company licensed by the Commissioner of Insurance other than the originator or its subsidiary, its parent company or the parent company;(e)an instrument issued by a bilateral or multilateral institution of which Kenya is a member;(f)issue of subordinated tranches;(g)an instrument issued by the Government of Kenya; or(h)such other instrument or mechanism from such other entity as may be approved by the Authority.(2)Where the credit enhancement is to be provided by a bank, financial institution or insurance company licensed in Kenya, the credit enhancement shall only be provided with the prior written consent of the Central Bank in the case of a bank or financial institution or the Commissioner of Insurance in the case of an insurance company