Egypt borrows $3.75bn through sale of government bonds

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Egypt had offered $3.75 billion worth of international bonds for sale in three tranches.

A document, issued by one of the banks arranging the transaction, revealed that Egypt sold the bonds in three tranches, the first tranche five-year bonds worth $750 million, with interest of 4.25 per cent, the second tranche 10-year bonds worth $1.5 billion, with interest of 6.125 per cent, and finally the third 40-year tranche worth $1.5 billion, with interest of 7.75 per cent. The document indicated that Egypt was addressing international debt markets to finance part of its budget deficit following the corona pandemic, and its consequences for the Egyptian economy.

Egypt sold $5 billion worth of government bonds in May last year as the largest issue in its history. In the same month, it received emergency funding from the International Monetary Fund amounting to $2.77 billion. In addition to a $5.2 billion conditional loan received in June of the same year from the International Monetary Fund, Egypt sold, in September, $750 million worth green bonds in the region’s first sovereign issue. In addition, $12 billion was received by Egypt between 2016 and 2019 from the International Monetary Fund.

Earlier last week, Egypt announced that external debt had jumped to $123 billion on 30 June 2020, up from $55 billion on 30 June 2016 (achieving an increase of $68 billion) and that the country’s public debt had reached £5.1 trillion.