Egyptian General Petroleum Corp hires HSBC to raise $1B loan: sources

DUBAI - 12 July 2018: Egyptian General Petroleum Corp (EGPC) has hired HSBC to arrange a loan of around $1 billion, five banking sources familiar with the matter said, the latest sign of international banks’ increased appetite for Egyptian debt.

Two of the sources said the loan was being requested by Petroleum Export Limited (PEL), a special purpose vehicle used by EGPC, Egypt’s national oil company, to raise several loans in the past.

The two sources said the new loan, like previous PEL transactions, will be a structured finance deal. In this case, the facility proceeds will partly be used to pre-pay EGPC cargo deliveries, the sources said.

A senior official at the state-controlled EGPC said it was not seeking any loan. He also said PEL was not the ultimate borrowing entity. HSBC declined to comment.

The pre-payment loan for EGPC, which has a five-year maturity, is now being syndicated to other banks, said the sources.

Business conditions are slowly improving in Egypt under a $12 billion three-year IMF loan programme tied to fiscal and economic reforms.

The IMF approved at the end of June a fourth payment, worth $2.02 billion, of its $12 billion loan. The latest payment brings the total received by Egypt from the IMF to around $8 billion, it said.

The country has emerged over the past few months as one of the most significant debt issuers in the region, with a wave of significantly sized U.S. dollar syndicated loan deals attracting interest from international banks.

State-owned Egyptian Electricity Holding Company (EEHC) has completed a $900 million syndicated loan last month, with HSBC and Credit Suisse coordinating the facility.

National Bank of Egypt was recently in the market for a $600 million loan, and Banque Misr is expected to raise $500 million through a loan arranged by Citi, sources told Reuters in May.