Egypt plans up to $7bn in international bonds in 2019-2020

Egypt’s ratio of debt to gross domestic product is on a downward trend and should drop to 77.5 percent by the end of June 2022. (AFP)
Updated 09 September 2019

Egypt plans up to $7bn in international bonds in 2019-2020

  • Egypt is interested in diversifying the currencies in which it issues its bonds to ensure hedging within the portfolio
  • Issuing sukuk, green bonds, yen or yuan bonds could allow Egypt to attract a new type of investor

CAIRO: Egypt intends to issue international bonds worth $3 billion $7 billion in the 2019-2020 financial year, Finance Minister Mohamed Maait said on Monday.
Egypt is also interested in diversifying the currencies in which it issues its bonds to ensure hedging within the portfolio, Maait said during an economic conference in Cairo.
The country has borrowed heavily from abroad since a $12 billion package was agreed. It faces a tough repayment schedule and a rising bill for oil imports.
Issuing sukuk, green bonds, yen or yuan bonds could allow Egypt to attract a new type of investor as a three-year IMF-backed economic reform program agreed in late 2016 draws to a close.
Maait said Egypt’s ratio of debt to gross domestic product is on a downward trend and should drop to 77.5 percent by the end of June 2022. The debt-to-GDP ratio was at 9025 percent in the fiscal year that ended in June, he said.
“We would love to go for yuan and yen,” Maait said in a separate interview on the sidelines of the Euromoney Egypt investment conference.
“We tried last year, but there are a lot of requirements. We couldn’t get all the requirements done. If we can do it this year, we would love to see Egypt going to these markets.”
The ministry is also looking at issuing green bonds and sukuk, Islamic bonds, but is not committing to a specific type of bond issuance, Maait said.
“We are targeting something between 3 (billion dollars) as a minimum and 7 as a maximum,” he said.
Last year, the ministry issued more than $6 billion in international bonds.
“We may do the same this year — or lower than that or higher than that — but within this boundary,” Maait said, without giving more details.
He declined to give details on when any issuance would take place nor which markets would be targeted.
Egyptian officials have previously announced their intention to issue Islamic bonds, but the plans did not materialize. Maait said some progress has been made on the procedures necessary to issue bonds in yen and yuan but did not elaborate.


Huawei in early talks with US firms to license 5G platform: executive

Updated 19 October 2019

Huawei in early talks with US firms to license 5G platform: executive

  • Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive
  • Huawei has spent billions to develop its 5G technology since 2009

WASHINGTON: Blacklisted Chinese telecoms equipment giant Huawei is in early-stage talks with some US telecoms companies about licensing its 5G network technology to them, a Huawei executive told Reuters on Friday.
Vincent Pang, senior vice president and board director at the company said some firms had expressed interest in both a long-term deal or a one-off transfer, declining to name or quantify the companies.
“There are some companies talking to us, but it would take a long journey to really finalize everything,” Pang explained on a visit to Washington this week. “They have shown interest,” he added, saying conversations are only a couple of weeks old and not at a detailed level yet.
The US government, fearing Huawei equipment could be used to spy on customers, has led a campaign to convince allies to bar it from their 5G networks. Huawei has repeatedly denied the claim.
Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive.
In May, Huawei, the world’s largest telecoms equipment provider, was placed on a US blacklist over national security concerns, banning it from buying American-made parts without a special license.
Washington also has brought criminal charges against the company, alleging bank fraud, violations of US sanctions against Iran, and theft of trade secrets, which Huawei denies.
Rules that were due out from the Commerce Department earlier this month are expected to effectively ban the company from the US telecoms supply chain.
The idea of a one-off fee in exchange for access to Huawei’s 5G patents, licenses, code and know-how was first floated by CEO and founder Ren Zhengfei in interviews with the New York Times and the Economist last month. But it was not previously clear whether there was any interest from US companies.
In an interview with Reuters last month, a State Department official expressed skepticism of Ren’s offer.
“It’s just not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves,” the person said. “If there are software bugs that are built in to the initial software, there would be no way to necessarily tell that those are there and they could be activated at any point, even if the software code is turned over to the mobile operators,” the official added.
For his part, Pang declined to predict whether any deal might be signed. However, he warned that the research and development investment required by continuously improving the platform after a single-transfer from Huawei would be very costly for the companies.
Huawei has spent billions to develop its 5G technology since 2009.