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Tuesday, 1 September 2020

Egypt secures USD 2 bn loan from int’l banking consortium

Egypt has closed a USD 2 bn financing package with regional and international banks to plug budget shortfalls resulting from the covid-19 crisis, Finance Minister Mohamed Mait said in a statement yesterday. The one-year facility is divided into two tranches: USD 1.5 bn offered on conventional terms and a USD 500 mn Islamic financing tranche, a source at the Finance Ministry told Enterprise. This would be the third major borrowing in the pipeline for Egypt after the IMF disbursed a USD 2.8 bn rapid financing instrument, and green-lit a USD 5.2 bn standby loan, USD 2 of which has been disbursed. Reuters also has the story.

High demand for Egyptian debt: The ministry was originally looking to borrow USD 1.5 bn, but said it bumped its request to USD 2 bn when it found lender appetite for c. 1.75x its request.

Parliament has already given the all-clear for the agreement to go ahead, the statement said.

Disbursement imminent: The Finance Ministry will draw down the full value of the package this week, ministry sources told Enterprise.

Emirates NBD and First Abu Dhabi Bank led the consortium that arranged the financing, the ministry said. Twelve financial institutions including HSBC, Citibank, Abu Dhabi Islamic Bank, Standard Chartered and Al Ahli Bank of Kuwait participated in the loan.

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