RIYADH: Egypt’s Ministry of Finance has announced its resurgence in the Japanese financial arena by successfully issuing its second international “Samurai” bonds valued at 75 billion Japanese yen ($500 million).
With an annual return rate of 1.5 percent for a 5-year term, the bonds represent a critical strategic step for the North African country amid prevailing global economic challenges.
The ministry said the bonds will not only aid in elongating the average lifespan of Egypt’s public debt portfolio but also in diversifying the country’s financing sources, tools, and currencies and expanding its base of international investors.
Furthermore, the Samurai bond issuance comes on the heels of another noteworthy financial milestone for Egypt as it announced its entry into the Chinese financial markets two weeks ago.
In October, Egypt ventured into the sector, releasing “Panda” bonds denominated in yuan. The issuance, valued at $500 million, offers an annual yield of 3.5 percent over three years.
Egypt’s Vice Minister of Finance for Fiscal Policies and Institutional Reform Ahmed Kouchouk stated that the Samurai bonds succeeded in piquing the interest of numerous Japanese stakeholders.
Elaborating on the issuance mechanics, Mohamed Hegazy, head of the public debt unit at the Ministry of Finance, highlighted the collaborative approach adopted.
He stated that the issuance was orchestrated in partnership with SMBC Nikko Securities, which acted as the offering manager, promoter, and underwriter.
Notably, the offering received a guarantee from both the Japanese bank, Sumitomo Mitsui Banking Corp., and the Africa Finance Corp., ensuring the premium pricing and full coverage of the targeted volume for the issuance.
Moreover, Egypt Central Bank data revealed that the country’s foreign debt decreased to approximately $164.7 billion by the end of June 2023, compared to $165.3 billion at the closing of last March.
