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Egypt issues proposal of Islamic debt for the first time in history

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Egypt’s finance ministry has released a statement saying the country is offering Islamic debt for the first time in history to partially resolve the dollar crisis plaguing Egypt.

Egyptian Finance Minister Mohamed Maait confirmed: “We were able to issue the first Islamic sovereign sukuk issue in Egypt’s history as the subscription cost was around $6.1 billion, which means that the subscription was covered more than four times.”

The Egyptian minister said the cost of the issue was more than seventy points below the required yield on bonds in the international secondary markets, as the yield on the placement was reduced by about 72.5 basis points from the opening prices announced at the beginning of the placement process at 11.675% , the closing price of the issue at the level of 11.675%.11%.

The Minister added that this issue witnessed a remarkable turnout with more than 250 investors in various global financial markets submitting bids, noting that this issue has attracted a new investor base in the GCC and East Asia, as well as in Europe and the United States. America, in addition to the quality of the quality of the investors he received. The offer was witnessed by asset managers, pension funds, insurance and investment funds, as well as banks, which are distinguished by their long-term retention of investments, which has a positive effect on limiting price fluctuations.

Maite explained: “Our success in issuing the first issue of sovereign Islamic sukuk in Egyptian history is due to the volatile global economic and political conditions, as well as the high cost of financing as a result of a sharp inflationary wave, in some ways this indicates confidence from the world’s financial markets and investors in the Egyptian economy and its future. And its ability to flexibly cope with internal and external challenges.

For his part, Ahmed Kazhuk, Deputy Minister of Financial Policy, said: “We are delighted to join the group of countries issuing sovereign sukuk and appreciate the high demand from investors for this successful issuance, which demonstrates their support and confidence in the government’s efforts to diversify sources. funding.”

He added that Egypt had prepared for the proposal by issuing the Sovereign Sukuk Law and its executive regulations to provide the necessary legislative umbrella to create a new type of government securities compatible with Islamic Sharia principles, in cooperation with leading banks in the field of Islamic finance and issuance. sukuk and with the help of local and international law firms to cover all technical aspects as well as legal and marketing aspects in accordance with international practice in accordance with the principles of Islamic law.

Mohamed Heghazi, Head of the Public Debt Management Department of the Ministry of Finance, explained that one of the most important provisions of the law and its by-laws is that the assets are privately owned by the state, and the Egyptian Sovereign Securitization Finance Company, an Egyptian joint stock company wholly owned by the Ministry finance, controls these assets, and also includes the direction of income Issuance of investment and development projects included in the economic plan for the general budget of the state, indicating the importance of Sukuk is due to the fact that they are new alternatives to provide the necessary financing for investment and development projects included in an economic plan for the state’s general budget, in a manner consistent with the state’s efforts to improve aspects of living standards spending. citizens, as well as helping to attract a new segment of Arab and foreign investors, especially from the Gulf countries and Asia, who prefer financial transactions that are compatible with the principles of Islamic Sharia, which helps to increase local and international foreign cash. flowing.

He noted that the Ministry of Finance has succeeded in establishing an international sovereign sukuk issuance program for the next few years worth $5 billion.

Source: RT

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