The Ministry of Finance intends to issue a brochure of conditions for the selection of bond managers abroad during this month, according to an official source at the ministry.
“In preparation for its launch, we will need between three to four weeks from the date of the tender for the completion of the selection of consultants for the offering,” the source said, noting that the ministry completed preparing the study two weeks ago.
The source, who spoke on condition of anonymity, said that the ministry is waiting for the opinion of investment banks, which will participate as consultants for international bonds, to decide whether to launch a new international bond programme or to use the existing programmes enlisted on the Irish, Luxembourg, and London stock exchanges. He noted that the ministry will also review the opinion of the participating banks on the ideal date for offering the bonds, as well as determine whether to start offering dollar or euro bonds.
The Egyptian government has two programmes to offer international bonds abroad on the Luxembourg and London stock exchanges, worth $10bn, next to another programme on the Irish Stock Exchange worth $12bn.
Finance Minister Amr El-Garhi said earlier this month that his ministry had initiated measures to launch an international bond tender worth $3-4bn in January.
According to the source, the Ministry of Finance aims to raise bonds denominated in euros, in addition to the issuance of dollar bonds in the first quarter of next year, with the aim of diversifying the portfolio of Egyptian bonds as well as investors.
In January, the Finance Ministry offered dollar bonds worth $4bn to be offered over three portions, maturing in five, ten, and 30 years with an interest up to 6.12%, 7.5%, and 8.5%, respectively. The lowest interest rate on the three portions is higher than the price on the international bonds put forward in 2015 with a maturity of ten years at 6%.
Four international banks took part in the January offering: Natixis France, Citibank, JPMorgan, and BNP Paribas.
In May, the ministry also offered bonds worth $3bn and sold $750m worth of the five-year bonds at an interest of 4.45%, $1bn of the ten-year bonds at 6.65%, and 1.25bn worth of the 30-year bonds at 7.95%.