Egypt issues $1bn bond to support development

Egypt has issued the first sovereign bond in the Middle East and North Africa since the start of the Iran conflict in an effort to support development.

The $1 billion issuance will expand Cairo’s investor base and the proceeds will go towards financing projects in healthcare and education, the cabinet said, citing a finance ministry statement.

The eight-year bond, with a 6.7 percent yield, attracted interest from global investors with orders booked more than fivefold.

A sell-off in US, European and Japanese sovereign debt has caused a renewed slump in Gulf government bond prices.

Gulf sovereign bond yields have increased, tracking a rise in US yields, although spreads between US treasuries and Gulf bonds have remained unchanged or tightened slightly.

Dollar-denominated Gulf sovereign bond prices have been volatile since the Iran war started, tumbling to milestone lows in mid-March before rebounding steadily to peak on or around April 21.

In April, finance minister Ahmed Kouchouk said Egypt was banking on higher public revenue from exports and the sale of government enterprises to slash its foreign debt by $1 billion to $2 billion in the 2026-2027 budget.

He said the 2026-2027 budget, which takes effect on July 1, targets a deficit of 5 percent of GDP. The debt-to-GDP ratio is forecast at 78 percent in June 2027, down from 87 percent in the previous year.

Kouchouk told US investors in October last year that Cairo intends to use proceeds from the sale of public enterprises to reduce the ratio of the national debt to GDP to 75 percent in the next three years.

Further reading:

• Egypt gains $1bn in World Bank funding for private sector
• Egypt seeks support from GCC banks for food imports
• Egypt signs loan agreement to support food and energy security