Egypt has reportedly appointed six international banks to manage its maiden $ 2 billion sovereign sukuk issuance, Bloomberg reports, citing unnamed sources it says have knowledge of the matter.
The sources reportedly said the issuance could go ahead in the second quarter of this year — in line with previous statements from the Finance Ministry, which has said it expects to wrap the issuance by the end of the fiscal year in June.
The banks are HSBC, Citigroup, Abu Dhabi Islamic Bank, Credit Agricole, Emirates NBD and First Abu Dhabi Bank.
FinMin in January got the green light from Cabinet to start preparing to take the issuance to international markets, but it won’t go ahead until the executive regulations of the Sovereign Sukuk Act — which was signed into law last year — are published. The government had been looking to finalize the exec regs by the end of January, but we’ve seen no sign of them yet. The Financial Regulatory Authority (FRA) and Al Azhar are working with the ministry on the regulations.
What is Sukuk?
The sharia-compliant bonds will be issued on both the local and international stock exchanges, Finance Minister Mohamed Maait said previously, adding that returns and trading on the securities will be subject to the same tax rules as treasury bonds. The issuance is part of FinMin’s strategy to reduce government debt and shift towards longer-term borrowing, which saw it issue its first green bonds in 2020. Plans are also underway to sell new “floating rate” bonds.
