The dollar bonds raised by Egypt a few days ago with a value of $1.5bn attracted more than 290 investors with a varied geographical distribution, according to Finance Minister Hany Kadry Dimian.
45% of the bonds were distributed in the US, 35% in the UK, 11% in Europe, 7% in the Middle East, and 2% in the rest of the world.
“This issuing of bonds is considered a major step in the path of the Egyptian economy and its ability to provide its own financial needs through global finance markets with suitable prices,” said Dimian.
He further statedthat the demand on the bonds reflects investors’ positive reactions towards the developments in the Egyptian economy.
He noted that it also reflects the global and regional support of investors, whereby the confidence in the Egyptian economy was confirmed through the improvement of the credit rating by Moody’s, from level “Caa1” to “B3” (stable vision) in April 2015. Further, Standard&Poor improved their ratings for Egypt from B3 to -B (Positive Outlook) in May 2015. In December 2014, Fitch also improved Egypt’s rating to B instead of -B.
A high-level delegation led by Dimian made a tour to promote the bonds through visiting a group of major investors in Dubai, Abu Dhabi, London, Los Angeles, Boston and New York. Issued bonds were priced using the (A/Regs144) system on4 June, with an interest warrant of 5.875% and an income of 6%, equivalent to 369.1 points inthe American treasury bonds.
The issued bonds were met with a great demand from global investors’ side, whereby demands reached $4.5bn, according to Dimian.
BNP Paribas, Citigroup Global Markets Limited, JP Morgan, Morgan Stanley & Co., International PLC and Natixis worked as consultants for the issuing of the bonds. Dechert LLP
Foreign investors expressed admiration for the pace and size of reforms carried out by the government in order to support structural changes and continuously push towards development, according to Dimian.
“Egypt plans to use the outcome of the bonds to finance the [state] budget. They will be displayed on the official list and traded in the Luxembourg exchange,” said Dimian.