International law firm Clifford Chance has advised the Egyptian Ministry of Finance (acting through its Debt Management Office) on its US$5 billion sovereign sukuk programme and the US$1.5 billion debut issuance thereunder. The issuance was oversubscribed more than four times and the proceeds will be used in the general budget of Egypt, including to finance investment and development projects in Egypt.
The issuance demonstrates the growing appetite for Shari’a compliant instruments from investors in the Gulf countries and East Asia as well as European countries and the United States of America.
Mohamed Hegazy, Head of the Debt Management Office for Egypt comments; “Thanks to Clifford Chance, and after 2 Years of working on the Sukuk project and its legislative framework, starting with the Executive regulations of the Sovereign Sukuk law till finalising the documentation, we succeeded in issuing the first Sovereign Sukuk in the history of Egypt, issuing US$1.5 billion, with a total subscription in the issuance of about US$6.1 billion, which was oversubscribed more than four times. This demand paved the way to the reduction on the coupon, which was reduced by 75 basis points compared to the IPTs at the beginning of the offering at the level of 11.625%, to close the coupon at 10.875%. The issuance witnessed a remarkable demand and more than 250 investors in various global financial markets participated in the issuance, and attracted a new base of Islamic investors in the Gulf countries and East Asia. And that came after the successful establishment of our US$5 billion Trust Certificate issuance program, that was listed on the London Stock Exchange on February 14, 2023.”
The Clifford Chance team was led by partner and Global Head of Islamic Finance, Qudeer Latif together with US Securities partner Johannes Juette. The wider team involved counsel Ahmed Choudhry and senior associate Pearl Mahaga in Dubai and Stephanie Liman, Rachel Sumption and Joel Sherard on US securities matters.
Qudeer commented: “We are delighted to have been able to support the Egyptian Ministry of Finance on this hugely important transaction and we congratulate the DMO. Clifford Chance is at the forefront of the sovereign sukuk market and our Islamic finance expertise as well as our global strength was key for us to be able to support the DMO in successfully delivering this transaction. This is also an important milestone for Africa and demonstrates the growing connectivity between Islamic finance and the African continent.”
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