Second local sovereign sukuk issuance met with strong investor appetite: The country’s second local sovereign sukuk issuance was 11x oversubscribed, attracting an order book of EGP 33 bn, according to official auction data seen by EnterpriseAM. The three-year EGP 3 bn ijara issuance — a leasing-based Islamic security — is the second tranche of the country’s first-ever local sukuk offering.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

About the issuance: The auction drew 31 offers, and the high demand brought the yields to 21.2% — slightly below the first tranche’s 21.6%. Despite the high demand, the Finance Ministry only accepted a single order for EGP 10 bn at a yield of 21.5%.

Four Gulf banks subscribed to the issuance, reflecting intensifying regional appetite for sharia-compliant public debt, a government source told EnterpriseAM.

We’re sensing a trend: The first tranche of our maiden local sukuk issuance was almost 5x oversubscribed, attracting an order book of EGP 14.9 bn earlier this month. The Finance Ministry received 63 offers from banks participating in the auction but only accepted 10, covering its EGP 3 bn target.

Reshaping the debt market: “We are witnessing a restructuring of the domestic debt market, with sukuk attracting strong interest from banks,” the source told us, adding that the instrument is opening the door to new classes of Islamic and regional investors.

What’s next: Government sources told EnterpriseAM earlier this week that the Finance Ministry is gearing up to launch three sukuk issuances in December totaling EGP 14 bn, before shifting to weekly sukuk offerings starting in 3Q of the current fiscal year.

We knew this was coming: A senior government official told EnterpriseAM last week about the offering, adding that its settlement is scheduled for the following day.

Tags: