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Egypt expects to issue $4 billion in eurobond sale

Reuters , Tuesday 24 Jan 2017
Egypt of finance
Cairo's headquarters of the Egyptian ministry of finance (Photo Al-Ahram)
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Egypt expects to sell $4 billion in a triple-tranche eurobond issuance, twice its target when it began a roadshow last week, with yields ranging from 6.125 to 8.5 percent, bankers involved in the deal said on Tuesday.

Bankers said Egypt expected to purchase $1.75 billion in five-year bonds at 6.125 percent, $1 billion in ten-year bonds at 7.50-7.625 percent, and $1.25 billion in 30-year bonds at 8.375-8.50 percent.

There has not yet been an announcement on final prices.

The combined order books for the bonds were over $13.5 billion incorporating the start of sales on the U.S. market, they said, though Egypt is expected to accept less than that amount.

The bonds will be listed on the Luxembourg Stock Exchange. The offering is being run by BNP Paribas, Citigroup, JP Morgan and Natixis.

Egypt had planned to begin its roadshow in November but postponed it due to market volatility.

The country of over 90 million has been seeking a variety of funding sources, from development loans to foreign grants and aid, to plug its financing needs as it struggles with an acute dollar shortage that has hampered its ability to import.

The central bank abandoned its currency peg of 8.8 pounds to the U.S. dollar in November and raised interest rates by 300 basis points in a move it hopes will unlock currency inflows and bring back foreign investors driven away after a 2011 uprising.

The currency flotation helped Egypt clinch a $12 billion loan programme from the International Monetary Fund to support plans for sweeping economic reforms. The IMF deal and flotation have helped propel the Egyptian stock market to multi-year highs.

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