Egypt Completes $2bn Financing Deal To Support Budget

Egypt, one of the largest emerging markets in the MENA region, on Tuesday said it has successfully signed its debut global syndicated conventional and Islamic financing facility worth $2 billion.

The facility aims to diversify Egypt’s sources of funding and its access to international capital market instruments. The proceeds will primarily be used to finance the country’s budgetary requirements, and support the country in safeguarding its economic trajectory and weathering the prevailing volatility in the global markets.

Emirates NBD Capital Limited, the investment banking arm of Emirates NBD, and First Abu Dhabi Bank (FAB) acted as the joint global coordinators and initial mandated lead arrangers and bookrunners.

Amid a challenging market backdrop due to the on-going Covid-19 crisis, the transaction received an "overwhelming" response from the market with a 1.75x oversubscription, a statement said.

It added that Egypt chose to exercise the green-shoe option to upsize the facility to $2 billion from the size at launch of $1.5 billion.

"The success of this transaction reiterates the strong regional and international investor confidence in the Egyptian economy, and its progressive credit story," the statement said.

Mohamed Maait, Minister of Finance, Arab Republic of Egypt, said: “We are proud of the appetite and interest received from regional and international banks in the syndication. It is a signal of Egypt’s successful reform program. Amidst challenging conditions, Egypt is reaping the fruit of consistent efforts towards enhancing its economy’s resilience. Egypt is continuously diversifying its funding sources by tapping regional as well as Islamic sources of finance.”

Fahad Abdulqader Al Qassim, CEO, Emirates NBD Capital added: “The success of the debut syndicated loan market issuance reaffirms Egypt’s favourable position in emerging markets and the growing cross-border investor confidence in the country... The deal reiterates Emirates NBD’s commitment to its global strategic clients amidst a rapidly changing market landscape and our ability to provide optimal funding solutions in both Islamic and conventional formats.”

Andy Cairns, senior managing director and head of global corporate finance, First Abu Dhabi Bank, said: "That the transaction was oversubscribed evidences the high standing the Egypt sovereign is held by international and regional lenders as well as being testament to the country’s sound economic health.”