Egypt successfully closed a €2bn eurobond issuance, the country’s first public bond denominated in euros. The offering was 3.8 times oversubscribed, attracting purchase orders of €7.5bn from over 350 investors from 35 countries, according to a statement issued by the Ministry of Finance on Monday.
The eurobond issuance was divided into two equal tranches; eight-year notes with a yield of 4.75%, and 12-year notes with a yield of 5.625%.
According to the statement, high demand for the issuance is a reflection of foreign investors’ confidence in the reform measures undertaken by the Egyptian government.
Furthermore, the eurobond proceeds will be directed to the Central Bank of Egypt to boost foreign reserves, according to Minister of Finance Amr El-Garhy. Egypt’s foreign exchange reserves reached the $42.61bn mark in March.
On the other hand, El-Garhy said that the equivalent value of the issuance in Egyptian pounds will be used to fill the financing gap in the budget.
El-Garhy headed a delegation on a three-day roadshow from 3-6 April. The tour included the United Kingdom, Germany, Italy, and France. The delegation held extensive meetings with numerous European investors, as well as 10 US investors, to present the most important aspects of Egypt’s recent successful economic and structural reforms ahead of the sale.
The eurobond issuance was arranged by BNP Paribas and the Bank of Alexandria (an Intesa Sanpaolo subsidiary). Deutsche Bank and Standard Chartered Bank acted as joint bookrunners for the offering, while the National Bank of Egypt and Banque Misr acted as co-bookrunners.
The latest issuance came after Egypt’s $4bn issuance in February which was in three tranches: three, five, and 30 years. In 2017, Egypt issued $7bn in eurobond sales in January and May 2017.