Egypt is planning to issue a batch of $500 million yen-denominated Samurai bonds for the third time before the end of November, according to Minister of Finance Mohamed Maait on Sunday.
The move comes at a time when Egypt is grappling with a shortage of foreign currency to meet its financial obligations.
Offering new international bonds serves as part of Egypt’s aspirations to obtain new external financing, added Maait during an interview with Asharq Business.
The Samurai bonds issuance represents part of the finance ministry’s plan to diversify the debt instruments as well as the currencies, issuance market, and investors, he noted previously.
In August, the Cabinet approved issuing a similar batch of Samurai bonds in Japanese yen with a total value of $500 million and a maturity period of five years for the second time.
The first time was in March 2022 in the first such move in the Middle East region. The value of the first offering was $500 million, or 60 billion yen with a yield of 0.85 percent over five years at that time.
The government periodically issues debt instruments to fund its budget deficit, which accounted for six percent of its GDP in FY2022/2023.
Furthermore, the issuance of debt instruments would support Egypt’s targets for securing $3 billion in financing through the end of 2023 from external markets to bridge its financing gap.
The country aims to secure these funds through the African Development Bank, and the Asian Investment International Bank, besides issuing fresh Panda and Samurai bonds that target the Asian market’s investors.
In this respect, Egypt issued last week the first sustainable Panda bonds in the Middle East and North Africa at ¥3.5 billion ($500 million) with a yield of 3.5 percent over three years.
Source: Ahram Online