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Monday, 16 January 2017

Egypt could double size of targeted eurobond issuance

It is definitely the Finance Ministry’s week in the spotlight. We learned yesterday that Egypt expects foreigners to buy as much as USD 10-11 bn of local debt, but, as expected, the eurobond issuance will all begin with a roadshow this week in which Egypt will be looking to raise USD 2-2.5 bn, as reported by Bloomberg. The majority of the eurobonds will come with five- and ten-year maturities but “a small portion” will carry a 30-year tenor. “Getting to [USD 10 bn] will happen gradually and with reassurance that the measures of the economic reform programme are happening gradually and in a sound manner … The more people see that we are achieving good results in our reform programme, the more they will be interested in investing so it is possible, within a year, to reach those levels [of USD 10-11 bn],” El Garhy said. The minister had said he was targeting USD 6 bn in eurobond sales in 2017 and the government will not limit itself to USD-denominated borrowing, but that it could also include yen- and yuan-denominated bonds (so it is a good time to brush up on your knowledge of Samurai and Panda bonds).

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