Egypt Plans Eurobond Sales After Cash Infusion Averts Crisis

Egypt is planning to tap international markets to sell dollar debt، or eurobonds، as soon as this fiscal year for the first time since late 2021، according to people familiar with the matter.

The country plans to sell around $3 billion of external debt in different tranches during the fiscal year through June، Finance Minister Ahmed Kouchouk told international investors in several in-person meetings in London this week، people with familiar with the talks said، asking not to be named as those discussions were closed to the press.

Debt issuance

It wasn’t clear how much of the projected debt issuance would be eurobonds، as the minister didn’t provide details، the people said. One of the borrowings may be an Islamic bond and a eurobond sale is also in the government’s plans، they said.

Egyptian officials didn’t respond to a request for comment on the government’s borrowing plans.

Egypt sold its last eurobond in 2021، joining a rush of emerging-market governments taking advantage of low borrowing costs before the U.S. Federal Reserve started tapering its pandemic stimulus.

Egypt’s dollar-denominated notes due in 2047 were trading above 80 cents on the dollar as of Friday، the highest level since 2022، according to data compiled by Bloomberg. The county’s dollar debt is the fourth best-performing among peers this year with a total return of more than 30%، more than three times the average across emerging markets.

Turnaround

In a few short weeks in March، Egypt emerged from its worst currency crisis in decades to become one of the hottest trades in emerging markets. That rapid change of fortune began with a $35 billion tourism development deal with the UAE، the largest inward investment in Egypt’s history.

The deal brought an infusion of dollars that paved the way for a record interest-rate hike and an expanded International Monetary Fund loan.

The agreement to transform Ras El-Hekma، a pristine stretch of Mediterranean coastline، into a tourism haven brought an immediate confidence boost that pulled Egypt back from the brink. Authorities followed it up with an interest-rate hike of six percentage points that helped to reverse capital flight and stabilize markets.