Back to the complete issue
Sunday, 13 February 2022

Egypt seeks guarantees for potential Samurai bonds

The Madbouly government wants our first Samurai bond issuance to be fully guaranteed by the Japan International Cooperation Agency (JICA) to ensure strong investor participation, Al Arabiya reported on Thursday, citing sources it says has knowledge of the matter. Officials are currently discussing the matter with the agency, which has “shown flexibility,” according to the sources, who added that no final agreement had yet been reached.

Egypt aims to sell around USD 500 mn of JPY-denominated bonds in Japan by the end of June as part of its debt diversification strategy, Finance Minister Mohamed Maait said last month. “The bond issuance will be in JPY, but the transfer currency can be in JPY or USD,” Maait said.

Asian investors expect to see an Asian rating agency in play? Officials are in talks with Japanese government financial institutions over to concerns that investors may hesitate to put money in Egyptian bonds over credit ratings, the unidentified sources reportedly told Al Arabiya. While Egypt’s sovereign credit rating generally has a stable outlook from the top three rating agencies (S&P Global, Moody’s, and Fitch), Asian markets do not usually rely on them to assess bonds. Marketing foreign bonds in Asia is a different ball game and requires new ratings assessments by Asian agencies.

Background: The government had been mulling selling JPY-denominated bonds back in 2019, but Maait said in late 2020 that the planned sales were being pushed until at least FY2021-2022 because of complications caused by the pandemic. Samurai bonds are issued in Tokyo by non-Japanese companies to access Japan’s financial market.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.