International newspapers have highlighted the Ministry of Finance's decision to issue $ 4 billion in Eurobonds for the first time since May 2017. According to Bloomberg، Egypt will begin approaching investment banks in a few days for a planned sale of euro-denominated bonds after successfully raising $4 billion from international debt markets to finance the budget deficit and bolster foreign reserves، Finance Minister Amr El-Garhy said. The sale of 1 billion to 1.5 billion euros in notes will “ideally” take place in April، and Egypt wants European banks to manage it، the minister said in a phone interview. On Tuesday، the government received about $12 billion in offers for its dollar-denominated bonds، in what the minister described as a “vote of confidence” in the Egyptian economy. The strategy of becoming a regular issuer on international markets will enable Egypt “to borrow easily and at relatively better pricing،” said Mohamed Abu Basha، an economist at investment bank EFG-Hermes in Cairo. Tuesday’s issuance completely covers Egypt’s financing gap for the fiscal year ending June 30، Deputy Finance Minister Ahmed Kouchouk said. It brings to $11 billion the total amount of international bonds Egypt has sold since floating the currency and securing a $12 billion International Monetary Fund loan in November 2016. On the other hand، British Financial Times Newspaper hailed the Finance Ministry’s decision as sign that investors’ appetite for relatively risky sovereign paper has been undimmed by the recent market turmoil.
The bonds were issued at three maturities، with a five-year tranche and a 10-year tranche raising $1.25bn each، while a 30-year tranche raised $1.5bn. The yields on the bonds were 5.577 per cent، 6.588 per cent and 7.903 per cent، respectively.
This week’s issuance attracted $12bn in orders from investors، Egypt’s foreign ministry said. The cash will be used to support its foreign reserves.
Citi، First Abu Dhabi Bank، HSBC، JP Morgan and Morgan Stanley acted as bookrunners on the deal. Egypt is rated B- positive by S&P and B positive by Fitch.