Dubai's Emirates NBD has successfully issued Egypt's debut sukuk worth $1.5B. The finance ministry issued the three-year sukuk through the Egyptian Financial Company for Sovereign Taskeek, and was oversubscribed four times with the order book fetching more than $6B. The sukuk received strong demand from a regional Sharia-compliant investor base, with 59% allocation to the MENA region, and significant appetite from global emerging market investors.
Emirates NBD jointly managed the transaction with Abu Dhabi Islamic Bank, Citi, Credit Agricole, First Abu Dhabi Bank, and HSBC. This issuance represents the third financing transaction that Emirates NBD. The sukuk will be listed on the London Stock Exchange, and the Egyptian government will reportedly use the proceeds to repay $1.25B in five-year Eurobonds.
Why it matters
Like other developing economies, Egypt has witnessed a significant surge in its borrowing costs after international central banks, headed by the U.S. Federal Reserve, raised interest rates to stabilize inflation. S&P Global has predicted a further decline in global sukuk issuance to $150B in 2023, following last year's slip in sukuk issuance to $155.8B, compared to the $170.4B raised in 2021.