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Tuesday, 10 April 2018

Egypt closes EUR 2 bn eurobond issuance, offering 3.8x oversubscribed

Egypt closes EUR 2 bn eurobond issuance: Egypt has successfully closed a EUR 2 bn eurobond sale that breaks down to two equal tranches of eight-year notes with a yield of 4.75% and 12-year notes with a yield of 5.625%, the Finance Ministry announced yesterday (pdf). The offering was 3.8x oversubscribed, attracting purchase orders of EUR 7.5 bn from over 350 investors from 35 countries. Demand for the issuance “reflects the international community’s renewed confidence in reform efforts,” according to the statement.

Proceeds will be used to boost the central bank’s FX reserves, which reached USD 42.61 bn in March, while the EGP equivalent will be used to plug the budget deficit and make financing available for several state projects. Finance Minister Amr El Garhy had led a ministry delegation on a three-day roadshow from 3-6 April to the UK, Germany, Italy, and France where they held extensive meetings with some 70 European investors, as well as 10 US investors, ahead of the sale. BNP Paribas, Intesa Sanpaolo subsidiary Banca IMI, Deutsche Bank, and Standard Chartered Bank acted as joint bookrunners for the offering — Egypt’s first EUR-denominated bond sale —with the National Bank of Egypt and Banque Misr as co-bookrunners. Zaki Hashem & Partners and Linklater are legal advisors to the investment banks, while Al Tamimi & Co. and Dechert were chosen as legal advisors to the government for the transaction, which follows a USD 4 bn issuance in February.

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