Egypt's vulnerable finances fell into crisis after the war in Ukraine triggered heavy foreign investment outflows from Egyptian financial markets. The cash-strapped country sought a four-year, $3 billion rescue plan from the International Monetary Fund that was finalised in December. The sukuk will be listed on the London Stock Exchange, issued through The Egyptian Financial Company for Sovereign Taskeek, with the finance ministry as obligor.
Joint lead managers and bookrunners on the sukuk are Abu Dhabi Islamic Bank, Citi, Credit Agricole, Emirates NBD Capital, First Abu Dhabi Bank and HSBC. The sukuk will help Egypt repay $1.25 billion in five-year Eurobonds, which carried a fixed interest rate of 5.577% and mature on Feb. 21. Egypt, like most countries, particularly in emerging markets, has seen its borrowing costs jump dramatically after central banks led by the U.S. Federal Reserve hiked interest rates at a breakneck pace to tame decades-high inflation. Moody's this month cut Egypt's sovereign rating deeper into "junk" territory, to B3, citing reduced external buffers and capacity to absorb shocks. Existing bonds fell following the downgrade. (Writing Nadine Awadalla and Yousef Saba; Editing by Jacqueline Wong, Mark Potter and David Gregorio)
