Emirates NBD is lead arranger on Egypt USD 1.5 billion debut sukuk

Emirates NBD is lead arranger on Egypt USD 1.5 billion debut sukuk

2 Min | 23 February 2023
Emirates NBD is lead arranger on Egypt USD 1.5 billion debut sukuk
  • Emirates NBD successfully prices USD 1.5 billion Government of Egypt debut sukuk
  • The three-year US dollar denominated sukuk carries a 10.875% profit rate
  • The sukuk was four times oversubscribed at its peak, leading to 62.5 bps profit rate compression from the initial price guidance

Dubai, 23 February 2023: Emirates NBD, a leading banking group in the MENAT (Middle East, North Africa and Turkey) region, has successfully priced Egypt’s USD 1.5 billion debut sovereign sukuk, underscoring the Group’s commitment to supporting the Government of Egypt’s efforts to obtain new and diversified sources of funding.

The three-year sukuk issued by the Ministry of Finance (MoF) through the Egyptian Financial Company for Sovereign Taskeek was oversubscribed four times, with the order book peaking more than USD 6 billion. The strong demand from regional Shari’ah-compliant investor base, with 59% allocation to MENA, as well as significant appetite from global emerging market investors led to a 62.5 bps compression from the initial 11.625% target to the final reoffer yield of11%.

Emirates NBD was one of the banks to have established the sukuk programme for the Government of Egypt following the recent approval and ratification of the Sovereign Sukuk law by the Egyptian parliament. Egypt’s approved sukuk programme is overseen by the Supervisory Committee that was established as part of the Sovereign Sukuk Law. The committee is made up of specialists in the fields of finance, economics and law as well as Islamic Sharia’h scholars from Al Azhar University, one of the most prominent centers of Islamic scholarship in the world.

The USD 1.5 billion sukuk uses a unique structure relying on a purchase of usufruct of real estate assets by the Egyptian Financial Company for Sovereign Taskeek and leased back to the MoF. The debt sukuk transaction led by Emirates NBD for Egypt follows two syndicated financing transactions that the Group has undertaken for Egypt. In July 2020, Emirates NBD was the lead arranger on a successfully priced USD 2 billion global syndicated facility through the MoF. The transaction was a debut syndicated bank financing for the MoF and incorporated the first widely syndicated dual Murabaha structure in the region. In November 2021, the Group arranged a USD 3 billion syndicated term financing facility on behalf of MoF, the country’s largest global syndicated term loan facility to date.

Commenting on the transaction, Ahmed Al Qassim, Group Head of Wholesale Banking, Emirates NBD, said: “We are delighted to have been the lead arranger for Egypt’s inaugural sovereign sukuk and to support the funding needs of the Government of Egypt by facilitating access to new pools of Islamic liquidity. The well-received sukuk represents the third financing transaction we have conducted for the Government of Egypt, a strong vote of confidence in the Group’s ability to meet the needs of our clients through innovative products and services. We are proud to have been advisors on some of the largest transactions in the region, providing our clients with tailored bespoke solutions for their complex finance requirements. We will continue to strengthen our relationships and our long-standing networks across key regional markets as we reinforce our position as one of the leading corporate banks in the Middle East“.

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