Bloomberg/Shawn Baldwin

Economy

Egypt mulls Panda, Samurai and Sukuk issuances for next fiscal year

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Diversification of instruments and a gradual shift from short-term debt toward longer-dated credit are pillars of a four-year debt strategy designed to reduce the burden for one of the Middle East’s most indebted countries.

Sunday 14, April 2019

(Bloomberg) -- Finance Minister Mohamed Maait said that the government is gearing up to issue its first panda, samurai as well as Sukuk and green bonds in the fiscal year starting in July as it attempts to cut borrowing costs by diversifying funding sources.

The country raised $6.2 billion from dollar and euro bond markets in early 2019, but postponed plans to issue debt denominated in Japanese yen and Chinese yuan as well as Sukuk and green bonds during the current fiscal year ending 30 June because it needs more time to prepare, Maait said.

“We will make sure that next year we will be more ready to issue panda, samurai and green bonds, we are not going to issue any new debt in the international market in the current fiscal year, Maait added.

Egypt already raised $2.2 billion from euro-denominated bonds last week, after raising $4 billion from the dollar debt market in February.

It’s targeting lower yields on domestic bonds and treasury bills in the new fiscal year, an average 15.5 per cent versus 18 per cent currently, confident that its securities will remain coveted.

The finance minister said that he isn’t worried that lower yields will affect demand for debt, improving Egypt’s fiscal and monetary position will give more confidence to our investors to invest and reduce the level of risk, which means that they can accept lower yield.

No decisions have been made regarding the size of the offerings or their timing.

Egypt is in talks with the International Monetary Fund (IMF) on a non-financial programme designed to reassure investors after it finishes disbursing a $12 billion loan in June.

 

TAGS : Sukuk, Panda bonds, Samurai bonds, Green bonds, Mohamed Maait

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