Egyptian pound and US dollar banknotes. AFP
Subscription requests have surpassed $3.9 billion, which allowed the annual yield to be reduced to 7.6 percent from 8 percent due to strong demand. The Egyptian Ministry of Finance hasn’t disclosed any details regarding the issuance as of yet.
Banks such as HSBC Bank, Deutsche Bank, and Citibank led the offering; any proceeds from the issuance will be used to finance and refinance social projects.
This issuance is the first for the international market since the start of the US-Israeli war on Iran. It is also part of the government’s effort to diversify financing tools, lower borrowing costs, expand the investor base, extend debt maturities, manage debt more efficiently, and reduce the debt-to-GDP ratio.
The country has been facing capital-flow pressures, heightened inflation, and currency fluctuations since the start of the conflict on 28 February.
If the regional unrest persists, it could drive inflation higher to 28–30 percent and continue pressure on capital flows.
Moreover, the government seeks to bring the debt-to-GDP ratio below 75 percent within the next three years and down to 40 percent or less by the end of FY2025/2026 (ending 30 June 2026).
This is alongside a plan to issue $2 billion in international bonds by the end of the fiscal year and lower overall debt by reducing the external debt of budget entities by $1–2 billion annually.
The International Monetary Fund (IMF) warned that debt service remains a significant burden on Egypt, while the country’s debt remains sustainable in the medium term, reliance on short-term domestic debt exposes rollover risks and interest rate volatility.
As a result, the IMF extended the Extended Fund Facility (EFF) loan programme to mid-December 2026 to accommodate delays and allow time for Egypt to implement the reforms recommended by the fund, especially those related to tax and debt management.
The discussions on the EFF’s seventh review are expected to kick off in May before concluding in mid-June.
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