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Sunday, 17 November 2019

Egypt successfully closes USD 2 bn triple-tranche eurobond issuance

Egypt successfully closes USD 2 bn triple-tranche eurobond issuance in first int’l debt auction for FY2019-2020: Egypt sold USD 2 bn-worth of four-, 12-, and 40-year USD-denominated eurobonds in an issuance that went to market on the Luxembourg Stock Exchange on Thursday, the Finance Ministry said. The offering was more than 7x oversubscribed, attracting USD 14.5 bn in requests, driving down the final yields by 45 bps from the initial price guidance. The triple-tranche issuance saw the government selling USD 500 mn of four-year bonds with a yield of 4.55% yields, USD 1 bn of 12-year notes carrying a yield of 7.05%, and USD 500 mn of 40-year notes carrying a yield of 8.15%. Reuters also had the story.

The 40-year bonds Egypt sold are the longest maturity bonds in the Middle East and North Africa, the ministry said. Moving towards longer-term debt is a key component of the government’s comprehensive debt reduction strategy, which it began implementing in March. Egypt’s foreign debt stood at USD 108.7 bn at the end of FY2018-2019.

We could see another USD 3 bn-worth of eurobond issuances between now and July. The ministry had previously received cabinet approval to issue USD 5 bn-worth of eurobonds this fiscal year, which ends in June.

Advisors: Citibank, JPMorgan, BNP Paribas, Natixis, and Standard Chartered acted as joint bookrunners for the offering. Al Tamimi & Company acted as local legal advisor, while Dechert was international counsel.

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