Egypt sold USD 750 mn in green bonds yesterday in what was the region’s first sovereign offering of the climate-friendly securities, Bloomberg reports. The issuance was almost 5x oversubscribed, attracting some USD 3.7 bn worth of orders for the bonds, pointing to growing appetites for climate-friendly securities worldwide. The government had been expected to sell USD 500 mn of the bonds.

About the offering: The sale consists five-year notes, which were initially taken to market at a yield of 5.75% but were sold 50 bps lower at 5.25%, Reuters suggests. The bonds will finance the development of Egypt’s USD 1.9 bn portfolio of green projects, including clean transportation, renewable energy and sustainable water management, the report noted.

The offering attracted new investors, with a virtual roadshow “attended by many who are speaking to Egypt for the first time,” Reuters reports, citing an unnamed source familiar with the transaction. Sustainability analysts and global investors were among those interested in the sale., said that while the bonds offer value “when compared to the existing secondary Egyptian curve … I think they might tighten,” Zeina Rizk, Arqaam Capital’s executive fixed income director, said as the bonds were being marketed. Recent market weakness over fears of a second covid-19 wave and “market indigestion” from the large number of new issuance could make investors more selective, she said.

Advisors: Credit Agricole, HSBC, Citibank, and Deutsche Bank were tapped earlier this year to manage and market the offering.

Background: Egypt’s first sovereign green bond sale comes as part of the government’s debt diversification strategy, which entails a shift towards longer-term debt, which the government hopes will constitute some 52% of borrowing by June 2022. CIB is expected to follow suit and issue Egypt’s first corporate green bond next month.