Egypt puts global bond issue on hold during Iran conflict

• Government postpones issuance
• Heightened uncertainty and high cost
• Favouring local financing options

The Egyptian government has reportedly postponed its global bond issuance due to the US-Israeli and Iran war.

Last month finance minister Ahmed Kouchouk said the government was planning to raise $2 billion through bonds by the end of June.

The decision to delay issuance shows heightened uncertainty in global financial markets and higher costs of insuring sovereign debt, an unnamed government official told Asharq Business.

They added that the current timing is unsuitable for international borrowing, despite the country’s recent success in regularly repaying its sovereign debt obligations.

However, the finance ministry is favouring local financing alternatives or temporarily activating its own resources until the geopolitical situation stabilises.

The fiscal year in Egypt officially begins on July 1.

The government will consider issuing the bonds before the end of the current fiscal year if global market conditions improve, the unnamed source said.

Cairo returned to the international bond market early last year with a $2 billion issuance, its first since 2021, to bridge an estimated $10 billion financing gap for fiscal year 2024-25. 

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The government also issued $1.5 billion in international bonds in October, with investor demand exceeding $9 billion, the report said.

Last month AGBI reported that Egypt will issue bonds to its citizens through post offices across the country.

The country’s government wants to lower annual external debt by $1 billion to $2 billion by diversifying its funding sources, attracting new investors and extending debt maturities at lower costs, the minister said.