Egypt becomes first ME country to issue JPY samurai bonds

Egypt has closed its first JPY samurai bond issuance, after the Egyptian Cabinet agreed to issue samurai bonds in Japanese yen.

Egyptian Finance Minister Mohamed Maait had reviewed the details on March 24, 2022. 

This comes within the framework of achieving the goals of diversifying sources of financing, reducing the cost of debt servicing and attracting new segments of foreign investors and new global markets, according to a press release.

The issuance at a value of JPY 60 billion ($500 million) makes Egypt the first country in the Middle East to issue bonds in JPY.

The Ministry of Finance launched this issuance with a credit guarantee from Japan’s Sumitomo Mitsui Banking and coverage from Nippon Export and Investment Insurance.

The ministry has offered low pricing for its samurai bonds in the Japanese market, with a coupon rate of 0.85 percent annually for a five-year period, a competitive rate when  compared to the coupon prices of international dollar bond issuances, with an average total annual cost of 2.33 percent.

The minister explained that the full value of the issuance was covered entirely by 41 Japanese investors from Japanese financial institutions.

Maait pointed out that this issuance is the result of a year-long plan, through which the Ministry of Finance succeeded in entering the Japanese financial market.

He added this was despite the unstable state of global financial markets hampered by the continuing Russia-Ukraine crisis. 

Investors were increasingly seeking safe, less risky investments such as bonds issued by developed countries with a high credit rating, and thus the demand for bonds of emerging countries has decreased.