Egypt signs 1st conventional, Islamic financing to state budget worth $2B

CAIRO – 31 August 2020: Ministry of Finance signed the first conventional and Islamic financing facility, with a value of $ 2 billion.

The Ministry clarified in a statement Monday that this financing comes with the aim of financing the state's general budget and supporting the Egyptian economy, to contribute to maintaining its strong path in the face of prevailing fluctuations in global markets.

House of Representatives had approved this financing facility, and that Emirates NBD Capital Ltd., the investment banking arm of Emirates NBD and First Abu Dhabi Bank, were appointed as the joint global coordinators, the main authorized regulators, and IPO managers which will complete this transaction.

The statement pointed out that Emirates NBD Capital acted as a documentation bank, and First Abu Dhabi Bank as a global agent and an agent for facilitation and investment.

It added that the facility's offering process has been launched by the IPO managers to select a group of Islamic and traditional financiers to participate in this public offering.

“Despite the difficult challenges that the market faced due to the repercussions of the ongoing coronavirus crisis, there was a great turnout, and the subscription coverage rate reached 1.75 times the value of the offering, so the Ministry of Finance increased the volume of financing from $ 1.5 billion to $ 2 billion, as shown,” it noted.

This turnout reflects the strong confidence of regional and international investors in the Egyptian economy and its stable credit rating, according to the statement.

Minister of Finance، Mohamed Ma’it, emphasized that the keenness of regional and international banks to participate in this joint financing facility is evidence of the success of the Egyptian economic reform program.

“Egypt is constantly working to diversify its sources of financing by making use of regional and Islamic sources of financing, and that First Abu Dhabi Bank and Emirates NBD, as global joint coordinators and underwriting managers, have shown competence in the successful closing of the deal,” Ma’it stated.

Assistant Minister of Finance for Economic Affairs, Sherine El Sharkawy, said that this “facility” was closed with the participation of a diverse mix of regional and international investors, as the main authorized regulators and the offering managers joined: “Mashreq Bank, ABC Islamic Bank, Arab Banking Corporation, HSBC Middle East Limited, Standard Chartered Bank, and  Sumitomo Mitsui Banking Corporation.

The main authorized regulators were Gulf International Bank, Abu Dhabi Islamic Bank, Al Ahli Bank of Kuwait, the Dubai International Financial Center Branch, Dubai Islamic Bank, Intesa San Paolo, Samba Financial Group, Sharjah Islamic Bank, and the main regulator: “Citibank NA Bank Branch London and the Emirates Islamic, pointing out that this "joint facility" aims to finance the state's general budget and maintain the strong path of the economy in the face of global market fluctuations, She stated.

For his part CEO of Emirates NBK Capital Fahd Abdel Kader Al-Kassem, , pointed to the success of the first issuance of joint facilities in the Egyptian market, indicating Egypt's positive position in emerging markets and increasing investor confidence across borders in the Egyptian state.

He expressed Emirates NBD Capital's welcome to coordinate the deal and its aspiration to play an effective role in Egypt's future financing requirements, explaining that the agreement confirms Emirates NBD's commitment to its global strategic clients in light of the rapidly changing market landscape and the ability to provide the best financing solutions in all forms. Islamic and traditional.

Managing Director and Head of Global Corporate Finance Sector at First Abu Dhabi Bank Andy Kearns, expressed First Abu Dhabi Bank’s pleasure to lead this first joint facility for the Egyptian Ministry of Finance, noting that the increased underwriting in the deal indicates the high position of Egypt among international and regional investors, as well as Being a testament to the strength of the Egyptian economy.