Fred L. H. Farha President
& CEO of the Fundmore Group was the author of several innovative
financial products and models that contributed to the expansion
of the financial services industry over the past 33 years. The following
is a short selection of his pioneering work:
structured the first commodity-linked
finance product in the United States, involving a major Puerto Rico
based molasses, sugar and rum manufacturer and several American
importers in support of a $ 39 million,
7 year, term loan facility that was funded by a Swiss banking syndicate,
that he organized, headed then by Banque Populare Suisse.
Canada, the Central Mortgage and Housing Corporation ("CMHC")
was created in 1956 by the Federal Government of Canada. Its purpose
was to assist Canadians to own their houses by providing direct
mortgages to house owners and mortgage guarantees to commercial
lenders. The law provided lenders with important guarantees, higher
interest rates and exemption from all taxations. For years CMHC
operated within the budgetary constraints of the Federal Government.
It was not able to meet the huge demand for mortgage funds. Fundmore
Corporation (Canada) Limited was then the third, largest independent
mortgage broker in Canada. Seeking to find new sources of funds
for his clients, Fred set out to study the operations and programs
of CMHC. He discovered that the CMHC loans program enjoyed sovereign
guarantees status and the relatively higher interest rates earned
from such loans were exempt from all forms of taxation. With the
assistance of Lazard Freres & Cie, Paris, he arranged the (first)
cross-border syndicated mortgage loan facility in Canada
in the amount of $13.2 million for an Ottawa based Development Company.
His model was adopted, at short notice, by Canadian banks and Trust
companies. It was used to channel billions of dollars to the Canadian
1975: was invited
by a young Saudi Prince to " help him build the Saudi Arabia
of the future". The country poised, to take its giant leap,
was lacking in banking and financial services. To finance the first
project composed of 10 apartment buildings, retail and leisure facilities,
at a value of $37 million, he successfully structured the (first)
non-recourse, loan facility based on "Design
Rent Finance Build ". He arranged funding with Citibank.
This model was used to finance hundreds of projects in Saudi Arabia
and the Gulf States. It is said that this model materially influenced
the Turkish model of Build Operate Transfer (BOT).
1989: structured the first (composite)
limited recourse, barter, countertrade, commodity-linked, asset-based,
foreign aid and Islamic financing (credit enhancements) in support
of $146 million: medium term loan facility, trade credit facility
and operating capital loan facility for an integrated feedlot, feedstock,
slaughtering and meat processing plant jointly owned by the Ministry
of Agriculture of Somalia and a major Canadian meat packaging company.