Egypt issued Japanese Yen*-dominated bonds with a total of $500 million, the first of their kind in Egypt and the Middle East in order to address financial challenges according to Minister of Finance Mohamed Maait
The issuance is called the “Samurai bond” and is issued for the Japanese market, he added
The Samurai bond is a yen-denominated bond issued in Tokyo by non-Japanese firms and is run under Japanese regulations.
These kinds of bonds allow the issuer to access Japanese capital, which can be tapped for domestic investments or for financing operations outside Japan.
It is worth noting that this bond is an instrument to which the government can resort to support their economies against foreign currency exchange risks, which is an ongoing threat to emerging markets amid the inflationary pressure imposed by the pandemic and aggravated by the Russian-Ukrainian conflict.
Maait said that this issuance took place despite the ongoing challenges with an insurance guarantee secured from the Bank of Japan and covered by Sumitomo Mitsui, a Japanese state-run insurance company, and Nippon Export and Investment Insurance.
The bond maturity is five years with an average cost representing 2.33 percent annual issuance, according to the minister.
He also noted that the proceeds of this issuance are part of the finance ministry’s plan to diversify the debt instruments as well as the currencies, issuance market and investors.
It also aims to prolong Egypt’s debt maturity, reducing the external debt and finance costs.
