Egypt issues $4 bln in Eurobonds

Egypt has raised $4 billion in a dollar-denominated Eurobond sale that closed late on Tuesday, the finance ministry said, part of a drive to plug its budget deficit and boost dollar holdings as it pursues an IMF-backed reform program.

The bonds were issued in five, 10- and 30-year tenors at 5.58 pct, 6.59 pct and 7.9 pct, respectively - prices on par with Eurobonds it sold last May.

The issuance attracted $12 billion in bids, and were sold “despite the instability of the global market, which reflects the great confidence in the Egyptian economic reform program,” Finance Minister Amr El Garhy told Reuters.

Egypt in late 2016 agreed to a three-year $12 billion IMF loan program tied to sweeping reforms that include tax hikes and subsidy cuts aimed at enticing back investors that fled after its violent popular uprising in 2011.

Garhy said Egypt would begin talks this month with European banks to issue euro-denominated Eurobonds expected to valued at 1-1.5 billion euros and sold next April, he said.

Foreign debt

Egypt’s foreign debt rose to $80.8 billion in the quarter that ended in September.

The finance ministry said the latest Eurobond issuance would be used to boost central bank reserves, which stood at $38.209 billion at the end of January.

Reserves have steadily climbed since Egypt clinched the IMF loan and floated its pound currency in 2016, roughly halving it in value but drawing dollars back into a banking system that was grappling with an acute foreign currency shortage.

Egypt last year sold a total of $7 billion in Eurobonds over two issuances, part of its return to international markets after turmoil following the ouster of President Hosni Mubarak in 2011.