Egypt plans to issue $ 7 billion in international bonds

Egypt plans to issue $ 3 billion to $ 7 billion in international bonds in the 2019-2020 fiscal year, Finance Minister Mohamed Maait said on Monday, as the ministry issued treasury bills worth some 19 billion pounds (about $ 1.15 billion).

Speaking at an economic conference in Cairo, Maait said his country was also interested in diversifying bond issuance currencies to ensure hedging within its portfolio of international bonds.

The fiscal year starts in early July and lasts until the end of June of the following year, according to the General Budget Law.

The minister noted that his country is interested in issuing bonds in Chinese yuan, but this requires more requirements to achieve this, without further details.

Egypt has borrowed heavily from abroad since agreeing a $ 12 billion loan with the IMF. The country faces a difficult debt repayment schedule and risks of rising oil import bills.

At the end of August, Moody's said Egypt's debt sustainability remained very low and needed substantial funding over the next few years.

The issuance of sukuk, green bonds, yen bonds or the yuan would allow Egypt to attract a new type of investor at a time when a three-year IMF-backed economic reform program in late 2016 is drawing to a close, Reuters said.

The finance minister said the debt-to-GDP ratio was on the decline and should fall to 77.5% by the end of June 2022.

He added that the debt-to-GDP ratio stood at 90.2 percent in the fiscal year that ended in June.

Last year, the Treasury issued more than $ 6 billion in international bonds.

"We may be doing the same this year, or less or higher, but within these limits," Maait said. He declined to give details on when the issue or target markets would be issued.

At the end of March 2019, external debt rose 40.4 percent year-on-year to $ 106.2 billion, according to central bank data.

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In the meantime, the government borrowed about 19 billion pounds through the issuance of treasury bills, in order to finance the budget deficit.

The central bank issued on Thursday morning on behalf of the Ministry of Finance treasury bills worth 18.75 billion pounds, 91 days and 266 days, respectively.

The finance ministry plans to offer treasury bills with different deadlines totaling 52 billion pounds ($ 3.15 billion) in September, local media reported.

Since the liberalization of the local currency (pound) against foreign currency (dollar), debt has risen from 2.6 trillion pounds to four trillion pounds (the dollar equivalent of 16.50 pounds) during the current fiscal year, according to the budget figures.