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The Finance Ministry completed a USD 1 bn sovereign sukuk issuance on the Vienna Stock Exchange on Wednesday in a private placement, offering an annual yield of 7.875% with a three-year maturity, according to a statement from the Finance Ministry and another from the Vienna Stock Exchange seen by EnterpriseAM. The private placement was fully subscribed by Kuwait Finance House and follows Egypt’s maiden sukuk issuance in February 2023.
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The details: Sukuk holders will be paid a coupon every six months, with the first coupon set to be paid out last Thursday, according to the Vienna Stock Exchange statement. The issuance will help diversify funding sources and the investor base, the ministry statement reads.
This stands as Egypt’s second-ever sovereign sukuk issuance, following our maiden sukuk issuance back in 2023, and is part of the country’s USD 5 bn international sovereign sukuk program, according to the Finance Ministry statement.
REMEMBER- Both countries agreed two months ago on the sukuk issuance, which is likely to be part of Kuwait’s unconfirmed plan to turn its direct deposits in Egypt’s central bank, which currently stand at USD 4 bn, into direct investments.
It’s also possible that the issuance could be part of the government’s sukuk-funded RasShukier project, especially as a still-unnamed Gulf sovereign wealth fund has been gearing up to announce a big-ticket project in the Red Sea project “in the coming days,” we were told earlier this month by a senior government source. However, a government source who spoke to EnterpriseAM on Monday declined to comment on the issuance’s connection to the Ras Shukier project but added that a number of other sukuk-backed projects under the initiative with Gulf and local partners will be announced soon.
More sukuk issuances could be on their way: The government is set to move forward with its plan to issue the first sovereign sukuk denominated in EGP at the beginning of FY 2025-2026 “despite current events,” Finance Minister Ahmed Kouchouk told EnterpriseAM last week. We were told last month that the Finance Ministry was working to complete an issuance of USD 1.5-2 bn worth of sukuk that will help repay some USD 1.5 bn of maturing ten-year bonds issued back in June 2015.
