Egypt first country in Middle East to issue Samurai bonds: What you need to know

CAIRO – 6 April 2022: As per the Egyptian Ministry of Finance’s announcement late in March regarding issuing Samurai bonds, Egypt would thus be a leader in the Middle East in this field, the Cabinet said on Wednesday.

Egypt Today displays the things to know about the Egyptian step in this regard:

- Egypt is intending to raise $500 million worth of yen bonds, also known as Samurai bonds, this week as it attempts to diversify funding, Bloomberg reported.

- The yen-denominated five-year debt will target a yield of between 0.80 percent and 0.85 percent.

- Egypt will be the first country to issue international bonds denominated in Japanese yen currency in Japanese markets.

- The step to return to the international bond markets comes despite the repercussions of the Russian-Ukrainian crisis and the unprecedented global economic challenges it poses.

- Japanese multinational banking and financial services institution Sumitomo Mitsui Banking Corp will manage the transaction.

- Minister of Finance Mohamed Maait: Egypt’s success in launching the first Samurai bond issue in the Japanese market reflects the country’s ability to return to the international bond markets.

- Maait: The Egyptian issuance of Samurai bonds in the Japanese market succeeded in attracting many Japanese investors, as it was very popular with them.

- Maait: This indicates their confidence in the solidity of the Egyptian economy and its ability to achieve its goals in light of the current global economic repercussions.

- Maait: This issuance is characterized by specifications of a special nature due to the difference of the Japanese market from other international markets, as the Japanese investor is more selective in his investment policies and more willing to invest in the debt instruments of countries with a high credit rating.

Maait: This issuance comes within the Ministry of Finance's successful plan to diversify debt instruments, issue currencies and markets, and investor segments, extend the life of the debt, reduce the cost of external debt, and then reduce the cost of financing.

Issuing green bonds

Also, Egypt in September 2020 has become the first country in the Middle East and North Africa to issue green bonds worth $750 million with an interest rate of 5.25 percent.

- Maait: These bonds are issued to obtain financing for sustainable projects related to the environment and climate.

- World Bank: “Egypt’s example is inspiring other countries in the region—and emerging markets more broadly—to consider green bonds as a financial solution.”

This comes while Egypt is preparing to host the 2022 United Nations Climate Change Conference (COP27) in Sharm El-Sheikh city in November.

Since Egypt was announced to be the host of the landmark annual event, all state agencies have been working to prepare for the global event, and steps were taken to declare Sharm El-Sheikh, a green city.

The plan to declare Sharm El-Sheikh a green city included a main goal, which is the use of clean energy and encouragement of environmental investment in the areas of preserving the environment, and working on the establishment of a number of projects related to new energy, which was a priority.

All cars and buses in Sharm El Sheikh will operate by electricity, and more than 100 charging points will be established for these vehicles, according to what the Ministry of Environment announced.