Egypt which is looking to launch a fresh Eurobond next month says foreigners have invested a total of $17.6 billion in the country’s debt instruments since the central bank floated the pound currency in November 2016.
Egypt’s cabinet is expected to approve a plan to sell 1.5 billion in euro-denominated bonds in two to three weeks, the finance minister says, as the government seeks cheaper finance abroad to plug its budget gap.
The Finance Ministry has started initial discussions with some European investment banks, Finance Minister Amr El-Garhy said in an interview in Bahrain late on Saturday.
The notes, which will be Egypt’s first in euros, will likely have tenors of five to 10 years, he said. The plan is to sell the bonds before the end of November, El-Garhy told Bloomberg earlier.
There are some “pockets of money” in Europe that are interested in Egyptian assets, El-Garhy said. “We’re taking good advantage of the current market conditions as well as the progress in our current economic reform program.”
With local borrowing costs above 15 percent, Egypt is increasingly looking at international debt markets to capitalize on growing investor confidence after it floated its currency and cut costly energy subsidies. The steps helped seal a three-year $12 billion loan program from the International Monetary Fund in November. Egypt has since raised $7 billion from the sale of international bonds, helping foreign reserves surge to a record of more than $36 billion.
IMF’s second program review is expected by the end of October and analysts say Egypt is on is on course to meet fiscal and monetary targets with economic activity starting to recover.
