Egypt Launches Longest International Bond in Middle East
Egypt has issued dollar-denominated Eurobonds worth two billion dollars in three tranches to cover part of its five billion dollars 2019-2020 budget, the finance minister announced in a statement on Thursday.
The issuance included $500 million of four-year bonds with a 4.55 percent yield, one billion dollars of 12-year bonds with a 7.05 percent yield and $500 million of 40-year bonds with an 8.15 percent yield, Mohamed Maait said.
Subscription orders exceeded $14.5 billion within few hours of the issuance announcement, which helped lower the yields by 45 basis points compared with the initial price guidance, he added.
Maait described the 40-year bond as “the longest international bond in the Middle East and North Africa.”
Egypt has a difficult foreign-debt repayment schedule for the next two years and is trying to expand its investor base, extend its maturity and borrow at lower interest rates.
The country’s foreign debt stood at $108.7 billion at the end of June, up 17.3 percent year-on-year.
The ministry succeeded in returning to the international bond market for the third time in 2019, earlier in the fiscal year than in previous years.
This has taken place between February and April, he noted, to be able to take advantage of the positive conditions currently witnessed by the international markets to cover part of the Ministry’s financing needs for the fiscal year 2019-2020.
These needs are estimated at five billion dollars, ranging from international issues in dollars, euros and one of the Asian currencies.
The Finance Ministry has said it plans to reduce its debt load to 80 percent of gross domestic product by June 2022, from 92 percent in June this year.
It also wants to more than double the average maturity of its sovereign securities to around four years by June 2020.