Banking & Finance Egypt hires banks for debut dollar sukuk as Eurobonds mature By Reuters February 19, 2023 Reuters/Mohamed Abd El Ghany Egypt's M1 money supply rose by an annual 33.1 percent in the year to end-July, down from an annual increase of 33.4 percent in June Egypt has hired banks for its debut sale of Islamic bonds denominated in US dollars, a document on the deal showed. A successful sukuk sale would help Egypt repay $1.25 billion in five-year Eurobonds that mature on February 21. Joint lead managers and bookrunners on the sukuk are Abu Dhabi Islamic Bank, Citi, Credit Agricole, Emirates NBD Capital, First Abu Dhabi Bank and HSBC. They will arrange investor calls starting on Friday, the document showed. A sale of three-year sukuk of benchmark size – typically at least $500 million – will follow, subject to market conditions. Egypt’s finances, already unsteady, fell into crisis after the war in Ukraine triggered heavy foreign investment outflows from Egyptian financial markets. The crisis prompted Egypt to seek a four-year, $3 billion rescue plan with the International Monetary Fund that was finalised in December. This month’s maturing Eurobonds carried a fixed interest rate of 5.577 percent. But analysts say it would be hard for Egypt to roll them over at anything close to this after the US Federal Reserve’s 4.5 percentage points in rate hikes over the last year and after Moody’s downgraded Egypt’s sovereign rating by one notch on February 7. Sukuk investors are also likely to demand higher yields, analysts added.
