Egypt debuts $2b conventional, Islamic syndicated term facility

Business Bureau, Gulf Today

The Arab Republic of Egypt (Egypt), acting through the Ministry of Finance (MoF Egypt or the Borrower), has successfully signed its debut global syndicated conventional and Islamic financing facility (the Facility) on July 20, 2020 and completed the Egyptian Parliament approval during its session held on Aug.18, 2020.

The Arab Republic of Egypt (Egypt) is one of the largest and most diversified emerging markets in the Mena region.

The Facility aims to diversify Egypt’s sources of funding and its access to international capital market instruments. The proceeds of the Facility would primarily be utilised to finance the country’s budgetary requirements, and support the country in safeguarding its strong economic trajectory over the past years and sustaining its strong footing to weather the prevailing volatility in the global markets.

Emirates NBD Capital Limited, the investment banking arm of Emirates NBD and First Abu Dhabi Bank (FAB) acted as the Joint Global Coordinators and Initial Mandated Lead Arrangers and Bookrunners (IMLABs) on the Facility.

In addition, Emirates NBD Capital acted as the Documentation Bank, and FAB as the Global Agent, Facility Agent and Investment Agent.

The Facility was anchored by the IMLABs and was launched to a select group of Islamic and Conventional investors in general syndication.

Amidst a challenging market backdrop due to the on-going COVID-19 crisis, the transaction received an overwhelming response from the market with a 1.75x oversubscription.

The Borrower chose to exercise the green-shoe option to upsize the Facility to $2 billion from the size at launch of $1.5 billion. The success of this transaction reiterates the strong regional and international investor confidence in the Egyptian economy, and its progressive credit story.

The Facility was closed with participation from a diversified mix of regional and international lenders, joining the Facility as:

Mandated Lead Arrangers and Bookrunners are

Mashreqbank, ABC Islamic Bank, Arab Banking Corporation, HSBC Bank Middle East Limited, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation.

Mandated Lead Arrangers are: Gulf International Bank, Abu Dhabi Islamic Bank, Al Ahli Bank of Kuwait KSCP - DIFC Branch, Dubai Islamic Bank PJSC, Intesa Sanpaolo, Samba Financial Group, Sharjah Islamic Bank. Lead Arrangers are Citibank, NA, London Branch, Emirates Islamic.

Mohamed Maait, Minister of Finance, Arab Republic of Egypt, commented: “We are proud of the appetite and interest received from regional and international banks in the syndication. It is a signal of Egypt’s successful reform programme.

Amidst challenging conditions, Egypt is reaping the fruit of consistent efforts towards enhancing its economy’s resilience. Egypt is continuously diversifying its funding sources by tapping regional as well as Islamic sources of finance.  Emirates NBD Capital and FAB, in their capacity as Joint Global Coordinators and IMLABs, demonstrated strong competence towards successful closure of the transaction.”

Fahad Abdulqader Al Qassim, Chief Executive Officer, Emirates NBD Capital commented: “The success of the debut syndicated loan market issuance reaffirms Egypt’s favourable position in emerging markets and the growing cross-border investor confidence in the country.”