Cairo November 3 2023: Egypt issued around $500 million of debt in Japan’s domestic bond market, as the North African nation looks to Asia to plug a funding gap while battling its worst foreign-currency crunch in decades.
The five-year Samurai securities carry an annual coupon of 1.5%. The issuance of Egypt’s second yen bond in Japan is part of the government’s push to diversify its debt, prolong the duration of its liabilities and attract new global investors, the Finance Ministry said on Thursday.
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Egypt is increasingly turning to Asia for capital as it struggles to move ahead with a delayed review of its $3 billion rescue program from the International Monetary Fund. It needs to attract additional financing ahead of a looming new devaluation that many analysts expect early next year.
Just last month, Egypt issued a Chinese yuan-denominated bond of around $500 million. Finance Minister Mohamed Maait had previously said the government expected to borrow at least $1.5 billion before the end of 2023, largely by tapping Asian markets as part of debt issuance guaranteed by development institutions.
The Samurai offering came a day before Fitch Ratings was set to release a report on Egypt’s credit score. Both S&P Global Ratings and Moody’s Investors Service have already downgraded the country’s sovereign assessment, citing concerns that include the currency crunch and the pace of economic reforms.
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Authorities have devalued the pound three times since early 2022 — moves that sent inflation to record highs and further squeezed a population already grappling with price hikes and the fallout from the Covid-19 pandemic.