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Thursday, 16 January 2020

Egypt is pressing pause on USD-denominated eurobond issuances for the remainder of FY2019-2020

EXCLUSIVE- The government is pressing pause on USD-denominated eurobond issuances for the remainder of the current fiscal year and will instead rely on a diverse set of debt instruments during the coming period, Finance Minister Mohamed Maait told Enterprise. Egypt successfully issued USD 2 bn-worth of USD-denominated eurobonds in a triple-tranche issuance that went to market in November at “very good yields” that the government does not expect to replicate on a similar issuance. Green bonds will likely take the lead in the government’s debt sales for the remainder of FY2019-2020, with a ministry committee currently looking at social and environmental sustainability projects to tie to the issuances, Maait says. The ministry will also rely on EUR-denominated eurobonds and sukuk (sharia-compliant bonds) to cover its financing needs.

Background: Maait had said last month that his ministry was considering tapping bond markets three more times before the end of FY2019-2020, saying that the offerings could be comprised of sukuk, green bonds, and variable-rate bonds. The minister had not disclosed a target figure at the time, but had said in September that the government plans to issue USD 3-7 bn in international bonds during the fiscal year. USD 2 bn of that target figure was achieved in the November issuance.

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