Egypt to start talks with European banks to issue 1-1.5B euro in Eurobonds

CAIRO – 14 February 2018: Egypt will start talks this month with European banks to issue euro denominated Eurobonds, Finance Minister Amr el-Garhy told Reuters Wednesday.

The value of the issue is expected to be 1-1.5 billion euros and will be sold next April, he added.

Egypt returned to the international bond markets on Wednesday with issuing Eurobonds worth $4 billion on three tranches; three, five and 30 years, the Finance Ministry said in a statement.

The purchase requests exceeded $12 billion in the first few hours after the issuance despite the volatility of the international stock markets, the statement said, adding that this reflects the increased interest for foreign investors in the Egyptian Economy in light of the economic reforms.

The outturn will be used to bolster the central bank’s foreign currency reserves, while the cash equivalent in Egyptian pounds will be directed to finance the activities of the state budget, the statement said.

Deputy Minister of Finance for Financial Policies Ahmed Kojak said that the Egyptian issue in the international markets has attracted more than 550 international investors from all target markets: Europe, America, Asia and the Middle East.

He added that they had received orders to buy bonds in large numbers, exceeding $500 million per investor.

Egypt issued $7 billion in Eurobonds' sales in January and May 2017 on the global bond market, both of which were oversubscribed, according to the Ministry of Finance.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the Value added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country has floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).

Egypt is to receive a fourth disbursal of that loan, worth $2 billion, in June or July, the Finance Ministry said in previous statements, bringing the total it has received to $8 billion.