Subscription to Egyptian dollar bonds closed
The first issue of Egyptian sovereign dollar bonds has witnessed unprecedented demand. Applying for subscription to these bonds were a host of financial establishments from Europe, the United States, investment banks, insurance companies, investment funds and big investors representing shareholding companies abroad.
Banks, which promoted these bonds, got applications for obtaining them to the value of $ 1.5 billion. This issue was put forth after the tour made by Youssef Boutros Ghali, Minister of Economy and Foreign Trade and Medhat Hassanein, Minister of Finance to 10 European states and 10 US states.
The two ministers had held meetings with investors, banks and world financial establishments.
The value of subscription applications to these bonds has amounted to S 3.1 billion. This has pushed the government to increase the volume to be issued from $ 500 million medium-term bonds for a period of five years to $ 1.5 billion medium and long-term bonds to the value of $ one billion for a period of 10 years.
Ghali said financial quarters considered such a coverage unprecedented for emerging countries which provided their bonds on the world financial markets.
Reports show that the number of financial establishments subscribing to these bonds were 224, of which seventy two come from the United States and one hundred sixty onr from Europe. As for the issue to the sum of $ 500 million, banks contributed 25%, investment funds 42 % and other investors 33 %.
As for the $ one billion 10-year issue, investment funds contributed 36 %, banks 18 %, insurance companies 12 %, shareholding companies and pension funds 34 per cent.
Minister of Economy said that the issue was made at a margin of 2.75 per cent for the five-year issue and 3.35 per cent for the ten-year issue, adding that this was the least margin witnessed by the world financial markets for emerging economies, which carries credit ratings equivalent to or more than the Egyptian credit ratings.
The Egyptian Ministry of Finance had issued sovereign dollar bonds after world banks viewed that Egypt could issue bonds to the value of $ 500 million for a five-year-period and $ one billion for a 10-year period.