Egypt Issues 1st Dollar-denominated Sovereign Sukuk

Egypt began selling sovereign dollar-dominated sukuk on Tuesday for a period of 3 years with a return of 11.375% to raise about $1.5 billion.

The issuance will be directed to financing investment and development projects. The yield on the sukuk was reduced from 11.625%, according to Reuters.

 The sukuk will be listed on the London Stock Exchange through the Egyptian Financial Company for Sovereign Sukuk, with the Ministry of Finance assuming the binding capacity.

Citigroup, Credit Agricole, Emirates NBD, First Abu Dhabi, Abu Dhabi Islamic, and HSBC are undertaking the offering process.

The issuance of sukuk is the first for Egypt in the global debt market since a private placement of $500 million for the first bonds denominated in the “Samurai” yen in March 2022.

Moody's Investors Service gave Egypt's proposed $5 billion sukuk program a "B3" rating.

The success of this offering may be supported by Egypt's repayment of international bonds worth $1.25 billion, which is required to be repaid this month.

Egypt suffers from an external financing gap of about $17 billion, according to estimates by the International Monetary Fund (IMF), and this offering will help it raise about $1.5 billion.