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Sunday, 14 October 2018

An Asian bond issuance might be in the cards after all

** #1 An Asian bond issuance looks increasingly in the cards, with Finance Minister Mohamed Maait reporting “very positive” feedback from his meetings with Asian investors in Seoul last week, where the ministry kicked off its nondeal roadshow on the continent to test appetite for the planned USD 5 bn eurobond issuance. Egypt has been “advised to try to issue in Asia,” Maait told Reuters yesterday, adding Egypt could tap debt markets with an offering in a currency other than the USD or EUR and that a decision would be made “in the near future.” The Finance Ministry embarked its pan-Asian roadshow last week amid talk that ‘samurai’ and ‘panda’ bonds were being considered. The roadshow should take officials next to Singapore, Hong Kong, China and Japan. Sources had told us that the government is planning to issue as much as USD 20 bn in foreign-currency denominated bonds between now and 2022 as it looks towards diversifying its sources of funding. The Madbouly government aims to strike a balance between foreign currency and interest rate risks by balancing its local-currency and foreign-currency borrowing.

Also from the pan-Asia roadshow: Maait, who was in Bali for the IMF and World Bank annual meetings, sat down with representatives of ratings agency Fitch, as well as executives from Citigroup, to discuss the Madbouly government’s ongoing economic reform program, Egypt’s fiscal policy, and the impact of the emerging markets selloff on investor appetite for Egyptian debt. The minister made the same solid pitch at an EFG Hermes investors call on Wednesday.

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