Egypt sells international bonds worth $3.75bn

CAIRO: Egypt has sold international bonds worth $3.75 billion, with the Finance Ministry reporting a positive response from the market.

The bond issuance was in three segments, the first with a five-year term at a value of $750 million and a 3.875 percent return, the second with a 10-year term at a value of $1.5 billion and a return of 5.875 percent, and the last with a 40-year term of $1.5 billion at a 7.5 percent return.

This is Egypt’s first bond issuance in the current fiscal year, and its second issuance with a maturity of 40 years.

The first issuance, for $2 billion, was in 2019 and was part of the ministry’s plan to diversify its funding sources and focus on longer-term debt.

Finance Minister Mohamed Maait said Egypt’s economy is facing a challenging time due to the coronavirus pandemic.

In December, the Central Bank of Egypt said tourism revenues had declined 21.6 percent during the 2019 / 2020 fiscal year, and 2.3 million people had lost their jobs due to the pandemic.

Maait said Egypt had paid what it owed on its bonds, and some other countries were unable to fulfil their obligations and pay the dues to bondholders due to the pandemic.

He added that the announcement of several COVID-19 vaccines led to optimism in the global market, and that the ministry had attracted $16.5 billion worth of applications for its latest bonds, 4.4 times the value of the offering.

He said Egypt plans to use the proceeds from the new bonds to finance the needs of the health sector, social protection, human development projects and financial stimulus programs to deal with the repercussions of the pandemic.

Maait previously said the state budget allows a maximum of $7 billion in bonds for a fiscal year.