The Ministry of Finance is considering issuing international bonds during the first half of 2025, according to informed government sources.
The source said that the issuance of international bonds will be determined according to global interest rates, which are expected to decline during the next year, “Therefore, the Ministry of Finance will seek to issue international bonds worth more than two billion dollars.”
What are international bonds?
International bonds are securities that allow the government to borrow from the foreign market, and are due for repayment after a certain period of time in exchange for an interest rate determined by the entity issuing the bonds. They are a financial instrument that helps diversify sources of financing and manage the needs of the state’s public treasury.
International bond programmes
Egypt has three international bond programs registered on the London Stock Exchange worth $40 billion, the Irish Stock Exchange worth $12 billion, and the Luxembourg Stock Exchange worth $30 billion.
Egypt’s balance of dollar international bond issues amounts to about $30.64 billion, including bonds worth $1.5 billion issued in June 2015, due for repayment in June 2025, and bonds worth $750 million issued in October 2020, due for repayment in October. First 2025.
International bond balance
As for the balance of international bond issues in euros, it is about four billion, while the balance of bonds in Japanese yen (Samurai Bonds), which were offered in the Japanese markets, is about 60 billion yen, and Chinese panda bonds in Chinese yuan amount to 3.5 billion Chinese yuan, due for repayment in October of 2026.
In September 2021, Egypt issued three billion dollars in bonds, taking advantage of lower borrowing costs before the US Federal Reserve began reducing its economic stimulus program and gradually raising interest rates.
Release date
The source indicated that the final date for the new offering will be determined following the Cabinet’s approval of the process, in addition to the advice provided by the investment banks – which will be chosen to manage the offering – about the appropriate date for issuing bonds in international markets.
Draft general budget of the state
According to a statement on the Egyptian state’s draft general budget for the fiscal year 2024-2025, the Ministry of Finance estimated the financing gap for the state’s general budget during the fiscal year 2024-2025 at about 2.84 trillion pounds, compared to the 2.14 billion pounds targeted during the last fiscal year.
According to the draft state budget, the Ministry of Finance aims to bridge the financing gap during the fiscal year 2024-2025, by obtaining the equivalent of 58.8 billion pounds from the International Monetary Fund, in addition to issuing international bonds with a value equivalent to 69.33 billion pounds, and obtaining loans from institutions. International equivalent to 140.09 billion pounds.
