Egypt has successfully raised $4bn from its third public bond issuance since the International Monetary Fund (IMF) approved a loan to the country. The three-tranche offering is distributed across $1.25bn in five-year notes, with a yield of 5.58%, $1.25bn in 10-year notes with a yield of 6.59%, and $1.5bn in 30-year notes with a yield of 7.91%.
Furthermore, the eurobond issuance closed with three times oversubscribed demand, registering at $12bn, during the first few hours of offering, despite the ongoing instability in the global financial markets, including the US raising its interest rates, and the highest level of US treasury bonds in four years, according to a statement issued by the Ministry of Finance on Wednesday.
“The $4bn eurobond issuance has closed and is three times oversubscribed, reflecting a strong endorsement of Egypt’s macro fundamentals,” said Minister of Finance Amr El-Garhy. He added that it reflects the progress in the Egyptian economy after the government adopted its economic reform programme, and the trust of international markets in the country’s economy.
El-Garhy explained that the bill’s outcome will be directed to the Central Bank of Egypt (CBE) to increase its foreign currency reserves.
The latest issuance witnessed strong demand from across the globe, especially from North America, Asia, and the Middle East, as a result to the structural reforms undertaken by the government and the improvements across all economic indicators, such as the reduction of budget deficits, improvement in international reserves, and lowering the unemployment rate.
On the other hand, Deputy Finance Minister Ahmed Kouchouk said that the fluctuations in global markets over the last two weeks did not curb investor appetite for the issuance, which opened with a total order book north of $12bn from some 550 investors.
Kouchouk added that the issuance reflects the growing confidence from foreign investors in the Egyptian economy and that Egypt is the first developing economy to close a eurobond offering since the start of the global sell-off.