Egypt successfully raises €2bn in eurobond issuance, closes 3.8 times oversubscribed

Mohamed Samir
2 Min Read
Amr El-Garhy, Egypt's finance minister, pauses during a Bloomberg Television interview in London, U.K., on Thursday, May 25, 2017. Wednesday's $3 billion debt issuance attracted $11 billion of orders, El-Garhy said during the interview. Photographer: Luke MacGregor/Bloomberg

Egypt successfully closed a €2bn eurobond issuance, the country’s first public bond denominated in euros. The offering was 3.8 times oversubscribed, attracting purchase orders of €7.5bn from over 350 investors from 35 countries, according to a statement issued by the Ministry of Finance on Monday.

The eurobond issuance was divided into two equal tranches; eight-year notes with a yield of 4.75%, and 12-year notes with a yield of 5.625%.

According to the statement, high demand for the issuance is a reflection of foreign investors’ confidence in the reform measures undertaken by the Egyptian government.

Furthermore, the eurobond proceeds will be directed to the Central Bank of Egypt to boost foreign reserves, according to Minister of Finance Amr El-Garhy. Egypt’s foreign exchange reserves reached the $42.61bn mark in March.

On the other hand, El-Garhy said that the equivalent value of the issuance in Egyptian pounds will be used to fill the financing gap in the budget.

El-Garhy headed a delegation on a three-day roadshow from 3-6 April. The tour included the United Kingdom, Germany, Italy, and France. The delegation held extensive meetings with numerous European investors, as well as 10 US investors, to present the most important aspects of Egypt’s recent successful economic and structural reforms ahead of the sale.

The eurobond issuance was arranged by BNP Paribas and the Bank of Alexandria (an Intesa Sanpaolo subsidiary). Deutsche Bank and Standard Chartered Bank acted as joint bookrunners for the offering, while the National Bank of Egypt and Banque Misr acted as co-bookrunners.

The latest issuance came after Egypt’s $4bn issuance in February which was in three tranches: three, five, and 30 years. In 2017, Egypt issued $7bn in eurobond sales in January and May 2017.

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Mohamed Samir Khedr is an economic and political journalist, analyst, and editor specializing in geopolitical conflicts in the Middle East, Africa, and the Eastern Mediterranean. For the past decade, he has covered Egypt's and the MENA region's financial, business, and geopolitical updates. Currently, he is the Executive Editor of the Daily News Egypt, where he leads a team of journalists in producing high-quality, in-depth reporting and analysis on the region's most pressing issues. His work has been featured in leading international publications. Samir is a highly respected expert on the Middle East and Africa, and his insights are regularly sought by policymakers, academics, and business leaders. He is a passionate advocate for independent journalism and a strong believer in the power of storytelling to inform and inspire. Twitter: LinkedIn:
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