JPMORGAN CHASE & CO./BLOOMBERG
Egypt has appointed five lenders, including JPMorgan Chase & Co. and Citigroup, to manage new dollar-denominated bond issuance in the current fiscal year as borrowers in emerging markets reap benefits of more dovish policies by major central banks, reported Bloomberg.
The Egyptian finance ministry said that Standard Chartered, BNP Paribas and Natixis are also part of the lenders working on the bond issuance.
Egypt is looking to take advantage of lower funding costs, pursuing a more diversified approach as it tries to reduce the burden for one of the Middle East’s most indebted countries. Mohamed Maait, the Egyptian Finance Minister, said, “After issuing its first euro-denominated bonds last fiscal year, the Government may borrow again in the common European currency while also considering Egypt’s first Panda, Samurai, Sukuk and green bonds.”
The Finance Ministry stated that the issuance is taking place to benefit from improvements in current economic circumstances in emerging markets and increasing demand from international investors for Egyptian bonds that lower the cost of financing.
Governments and companies in developing economies have raised a record $2.1 trillion through debt sales this year as they seized on investor appetite for yield. South Africa completed its biggest Eurobond sale last in September 2019.
Egypt raised $6.2 billion abroad in the fiscal year that ended in June 2019 and plans to borrow between $3 billion and $7 billion from international debt markets in the current fiscal year, said Maait.
Egypt’s fiscal discipline caught the attention of the three main rating agencies—Fitch Ratings, Moody’s and S&P —who has been upgrading the country’s sovereign ratings since 2018. Its highest assessment is from Fitch Ratings, which has it at B+, four levels below investment-grade.