EXCLUSIVE- Egypt to tap Arab banks for planned USD 1 bn sukuk issuance: The government will not approach international banks to manage a planned USD 1 bn sovereign sukuk issuance later this fiscal year, preferring instead to only work with Arab banks, government sources told Enterprise. “We've already begun talks with a number of banks that have contacted us to learn about Egypt’s plan to issue sovereign sukuks and they’re all Arab with experience,” one of the sources told us without disclosing any names. A senior government official told us in May that the government is hoping to appoint banks by September in order for the issuance to take place in early 2020. A ministerial committee is currently reviewing the legislative procedures, which must be in place before the issuance can proceed.

Background: The sovereign sukuk issuance was initially planned to take place last fiscal year, but Finance Minister Mohamed Maait said earlier this year that the government needed more time to comply with Euroclear requirements. We learned in May that Egypt could take to market its maiden issuance of sovereign sukuks in early 2020 with both medium and long-term maturities. Finance Ministry officials had met with executives from Abu Dhabi Islamic Bank and other GCC-based institutions to learn more about the process and the target markets. The Financial Regulatory Authority published last week a guide (pdf) on the rules and regulations of issuing sukuks.