Good afternoon, folks. Happy international coffee day to those of you who — like us — are powered by a strong cup of joe (or two, or three).

THE BIG STORY TODAY

Egypt’s return to the international debt market is getting off to a good start, with its USD 1.5 bn sharia-compliant offering receiving over USD 9 bn in subscription requests, according to a statement from the Finance Ministry. The dual-tranche sukuk issuance — scheduled for 7 October — is split between a USD 700 mn, 3.5-year tranche and a second USD 800 mn, seven-year tranche.

The issuance is smaller than we were told earlier this week, but still bigger than the government’s initial plan. Senior government sources put the issuance’s value at a larger USD 2 bn in comments to EnterpriseAM on Monday, but the slightly smaller issuance confirmed by the ministry today is still a significant jump from the USD 1 bn sovereign sukuk tranche that a senior government official told us was coming back in August.

Yields are a step lower than prevailing rates in the secondary market, with the 3.5-year tranche’s 6.375% yield a good 20 bps below prices for Egyptian bonds with the same maturities. The seven-year tranche’s 7.950% yield is down 35 bps on comparable Egyptian debt of the same maturity.

REMEMBER- The issuance stands as Egypt’s third-ever sovereign sukuk issuance and the fiscal year’s first, following June’s USD 1 bn sovereign sukuk issuance, which was fully subscribed by Kuwait Finance House, and our maiden sukuk issuance back in 2023.

THE BIG STORY ABROAD

International headlines have a single focus today: the US government shutdown. Following a bitter spending deadlock between US President Donald Trump and Democrats in Congress, the US federal government shut down after failing to reach a funding agreement by the midnight deadline, marking the first shutdown since 2019 and triggering widespread disruptions to federal services.

The core dispute centers on Democrats’ demands that Republicans extend expiring healthcare subsidies and restore Medicaid cuts enacted over the summer as part of Trump’s tax cut legislation. Without congressional action, around 4 mn US citizens are projected to lose ins. coverage by 31 December, with 10 mn more set to follow by 2034. (New York Times)

The shutdown disrupts the jobs of hundreds of thousands of US citizens and upends many public services, with an estimated 750k government employees facing temporary furloughs. Key economic reports will be delayed, national parks will largely be closed, and new federal loans for small businesses and homebuyers will be paused. Social Security, Medicare, and Medicaid benefits are expected to continue uninterrupted, and air traffic controllers and TSA agents will remain on the job, though unpaid. (CNBC | CNN)

Trump has said that he would move to enact measures that are “bad” and irreversible for Democrats, including cutting programs and laying off federal workers who are registered with the party. He has suggested that his administration would use this shutdown to conduct mass layoffs beyond temporary furloughs — which would come on top of roughly 150k workers leaving the federal workforce as of 1 October due to deferred resignation programs offered under Elon Musk’s DOGE effort. (Bloomberg)

With the two parties locked in a stalemate and using the moment to frame the 2026 midterm elections, the shutdown and its economic effects could be prolonged. The duration remains highly uncertain as both sides dig in on their positions.

☀️ TOMORROW’S WEATHER- Brace for a heat spike tomorrow in the capital — the mercury is set to rise to 35°C throughout the day before cooling to 24°C at night, according to our favorite weather app.

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