CAIRO: The National Bank of Egypt (NBE) will issue dollar-denominated bonds on international debt markets by June-end, with the aim of diversifying its hard currency sources, the bank’s CEO Hisham Okasha told Reuters Sunday evening.
In January, Egypt’s Cabinet approved a proposal from its Economic Committee to issue dollar-denominated foreign bonds valued at $1.5 billion in the global market, Youm7 reported.
“The dollar-denominated bonds’ issuance is aimed at luring fresh foreign capital inflow to boost Egyptian resources and to get financing from the external market in light of the recent improvement in international assessments for Egypt’s economy,” the Cabinet said in a statement posted on its website.
“The aim of the new bond issuance is diversifying sources of hard currency for the bank”, Okasha said.
Okasha did not disclose the issuance exact size, but said it would be in the range of an August issuance in 2010 valued at $600 million, according to Reuters. The interest on that issuance was 5.25 percent.
NBE is largest state-owned bank in Egypt with a 27 percent market share. It is also the oldest commercial bank in the country.
The bank has invited 13 international financial institutions to compete to arrange the bond issue in the coming period, he added.
Egypt is expected to receive financial deposits pledged by Gulf States’ leaders at the Egypt Economic Development Conference (EEDC) in the coming days.
Gulf countries, namely Saudi Arabia, the UAE, Kuwait and Oman, promised a total of $12.5 billion, in investments as well as deposits in the Central Bank of Egypt (CBE).
“The deposits will help bolster Egypt’s foreign currency reserves and ease pressure on its local currency,” CBE’s governor Hisham Ramez told MENA last week.
Egypt’s foreign reserves rose by $26 million to $15.45 billion at February-end, after noting a sharp slip at the end of 2014, on the back of repaying a $700 million six-month premium on foreign debt owed to the Paris Club in December, a month after baying back a $2.5 billion deposit to Qatar, following an official request from Doha.