The Finance Ministry is in advanced talks with transaction advisors to issue between USD 1.0 to USD 1.5 bn in Eurobonds as early as this month, a senior government official tells EnterpriseAM. The ministry is looking to capitalize on a sharp narrowing of risk premiums, with five-year credit default swaps on Egyptian debt falling below 270 bps — their lowest level in six years.

Why it matters: Yields on Egypt’s international bonds have retreated by 300-400 bps y-o-y, offering a window to raise capital at a much friendlier price. Debt service currently accounts for the vast majority of public spending.

The ministry could boost the size of the issuance as high as USD 2 bn if investor appetite is strong, our source told us. The ministry also plans to issue USD 500 mn worth of green samurai bonds before the fiscal year comes to a close in June as it looks to diversify its sources of international funding.

The move comes as Egypt shores up its liquidity, with EUR 1 bn from the EU due to land in our coffers today, Planning and International Cooperation Minister Rania Al Mashat announced earlier this week. Meanwhile, the country is awaiting an IMF board meeting to unlock a combined USD 2.7 bn from the fifth and sixth reviews of its loan program, along with the first review of the Resilience and Sustainability Facility.

When is the IMF meeting to talk about us? We’re not yet on the executive board’s public meeting agenda, which as of this morning stretches through 23 January.

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