Egypt to issue the $2.5 to 3 billion Eurobonds in January: Minister

Ahram Online , Monday 28 Nov 2016

Amr El-Garhay
File Photo: Finance Minister Amr El-Garhy at a news conference in Cairo, Egypt August 11, 2016. (Reuters)

Egypt will issue $2.5 to 3 billion-denominated Eurobonds in the global bond market in the first half of January, finance minister Amr El-Garhy said in a press conference on Monday.

In a press statement from the ministry, El-Garhy attributed the delay of Eurobond issuance—originally planned for the second half of November—to the disturbance in global capital markets resulting from the outcome of the US presidential election.

The minister added that another batch of dollar-denominated Eurobonds will be issued in the second half of 2017.

In September, deputy finance minister Ahmed Kouchouck said that the bonds could produce a yield of 6 to 6.5 percent.

El-Garhy has said previously that bond sales could reach a denomination of $5 billion, depending on the investors' appetite for purchase.

The finance ministry announced in August that four international investment banks— the French bank Natixis, Citibank, JP Morgan and BNP Paribas—were selected by Egypt to issue the dollar-denominated Eurobonds.

On the dues owed to the government by foreign oil companies, the minister stressed that the government is "respecting its commitments and ensuring that its partner companies will continue to make new investments in this sector," adding that repayment will take place in the upcoming period, without giving further details. 

On the decision to float the pound against foreign currencies, which took place early this month, El-Garhy said that the decision has yielded better results than expected as the foreign investments and bonds reached USD 500 million by November 20, exceeding 2010 levels.   

He added that after flotation brings tangible results, the inflation rate will decline by up to 10 percent over the second half of 2017.

The Central Bank of Egypt (CBE) decided to float the pound and raise key interest rates as part of a set of reforms aimed at alleviating the dollar shortage, eradicating the black market and stabilising the country's flagging economy.

The average exchange rate for the US dollar at local banks currently registers over EGP 17.5.

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