Economic Update – Follow-Up
Egypt has successfully issued international bonds totaling $2 billion, marking the country’s first dollar-denominated international bond issuance in four years.
An anonymous Egyptian banker noted that this issuance will assist in extending the average maturity of Egypt’s overall debt portfolio. He explained, “A significant portion of Egypt’s debt comprises short-term obligations, which poses risks and places substantial pressure on revenue and debt servicing costs.”
The Egyptian government has committed to improving the maturity profile of its total debt as part of an $8 billion reform package negotiated with the International Monetary Fund last March.
According to a banker involved in the transaction, the bond offering consists of two tranches: the first tranche amounts to $1.25 billion with a maturity of five years, while the second tranche is valued at $750 million with an eight-year maturity. The anticipated returns are 8.625% and 9.45%, respectively.
Investor demand for the bonds was robust, reaching approximately $10 billion for each tranche, reflecting strong market interest in sovereign debt from Egypt. Citigroup Global Markets facilitated the issuance.
This issuance signifies Egypt’s first sale of international bonds since 2021, when it raised $6.75 billion through dollar-denominated bonds.
The newly issued bonds are expected to be listed on the London Stock Exchange.
Egypt’s Finance Minister previously stated that the government aims to secure between $3 billion and $4 billion in international debt by the close of the current fiscal year in June.
According to the Ministry of Finance, Egypt is scheduled to repay bonds due in April, totaling €750 million, as well as another tranche denominated in dollars of $1.5 billion maturing in June. Additionally, $750 million worth of green bonds will be due in October.
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