Egypt raises USD 500 mn in AfDB-backed Samurai bonds

The government has issued USD 500 mn (JPY 80 bn) in sustainability Samurai bonds in Japan, backed by a partial credit guarantee from the African Development Bank (AfDB), according to a statement (pdf) from Japan Credit Rating Agency (JCR), which rated the transaction. The bonds were placed privately on Monday in two tranches — roughly USD 350 mn over five years and USD 150 mn over 10 years — to a small number of qualified institutional investors.

The guarantee: AfDB’s USD 620 mn guarantee was raised from the roughly USD 400 mn first floated last year, a government official tells EnterpriseAM. The guarantee exceeds the bond size, as it backs 100% of the principal on both tranches, plus coupon payments from year four onward on the 10-year bond and from month 18 onward on the five-year. Any interest accruing before those dates is not covered.

The yield: Egypt sold the five-year tranche at a 2.87% yield and the 10-year at 3.5%, our source says. Proceeds are earmarked for sustainable expenditures under Egypt’s Sovereign Sustainable Financing Framework. JCR assigned the five-year tranche AA+ and the 10-year tranche AA. Both are scheduled to step up to AAA once their respective coupon-guarantee periods begin — reflecting AfDB's own AAA rating, affirmed by JCR in January.

What comes next: The issuance closes out Egypt’s international placements for FY 2025/26 at USD 4 bn, following USD 3.5 bn raised earlier in the year. The Finance Ministry has more social bonds and international sukuk in the works in FY 2026/27, with total planned issuances of USD 3-4 bn under its expanded USD 40 bn medium-term international bond program.