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Monday, 8 October 2018

FinMin kicks off Asia roadshow ahead of planned eurobond issuance, to tap investors in European markets

** #2 FinMin kicks off Asia roadshow ahead of planned eurobond issuance, will also tap European investors: The Finance Ministry has launched a nondeal roadshow in Asia that is meant to help Egypt attract new investors to its debt market ahead of an anticipated USD 5 bn eurobond sale, according to a ministry statement (pdf). A delegation led by Finance Minister Mohamed Maait kicked off the roadshow in the South Korean capital of Seoul yesterday and is set to meet with prospective investors throughout the week. The pan-Asian roadshow will pick up again in the second week of November, with visits to Singapore, Hong Kong, China, and Japan on the agenda, according to the statement, which adds that officials intend to use the trip to gauge the Asian market’s appetite for Egyptian debt, as the government works to broaden its investor base by exploring previously untapped markets. Maait had previously said that Egypt was looking to test Asian markets for the potential issuance of JPY- and CNY- denominated samurai and panda bonds. The coming weeks will also see ministry officials travel to the UK, France, Italy, Switzerland, and Germany to promote the upcoming issuance. Reuters also has the story.

The Finance Ministry will hire advisors for the issuance soon after the roadshow, sources told Al Mal. It is still not yet known when the government would issue the bonds, but Maait had previously put the window at some time between January and March 2019.

Widening the pool of investors in Egyptian debt is critical amid outflows from domestic offerings during the ongoing Emerging Markets Zombie Apocalypse. The move comes after Egypt canceled four treasury bonds auctions in September due to yields that had surged to highs of 20% for five- and 10-year treasury bonds, according to some traders. Maait had also suggested that Egypt may be looking east for liquidity, and the Finance Ministry is said to be working on a comprehensive debt control strategy that would set limits on both internal and external borrowing in a bid to bring down overall public debt levels. The country’s foreign debt levels at the end of FY2017-18 stood at USD 92.64 bn.

Egypt’s foreign debt levels will continue to rise until 2020, Beltone Financial’s Alia Mamdouh speculated yesterday, telling Hona Al Asema’s Lama Gebriel that an influx in FX-denominated receipts from tourism, oil and gas, and exports will help offset the impact (watch, runtime: 5:37).

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