Egypt closed its maiden panda bond issuance in China yesterday with a CNY 3.5 bn (USD 478.7 mn) issuance, according to a statement. The proceeds will be used to fund sustainable projects across a number of sectors including clean transport, sustainable water usage, renewable energy, and affordable housing, Vice Minister of Finance Ahmed Kouchouk told Enterprise. The three-year securities were priced at a 3.5% annual rate, lower than the yield on USD-denominated debt, Minister Mohamed Maait said.

Accessing capital markets: “The issuance attracted high-quality onshore investors and allowed access to capital markets despite the recent volatility in global markets and widening of Egypt’s credit spreads,” Kouchouk told Enterprise.

It’s been on the back burner for a while: The inaugural issuance has been in the works since 2019, but was put on hold due to the pandemic.

Egypt has more in the pipeline: The ministry is planning to close a USD 500 mn issuance of JPY-denominated samurai bonds in the coming weeks, and raised USD 1.5 bn from its first-ever sovereign sukuk issuance in February.

International backing: The African Development Bank and Asian Infrastructure Investment Bank provided guarantees for the issuance.

Reducing reliance on the greenback: The ministry hopes that the CNY can become “an important and significant part of Egypt's basket of currencies” and that yesterday’s transaction will pave the way for further bilateral investment and sustainable financing between the two countries, Kouchouk said.