Finance Ministry issues 1st sovereign sukuk in local market at EGP 3B
Updated 11/4/2025 1:27:00 PM
Arab Finance: The Ministry of Finance launched its first sovereign sukuk issuance in the local market at a value of EGP 3 billion, through the primary dealer system, with a three-year maturity period, as per a statement.
This issuance is part of the ministry’s strategy to diversify funding sources, reduce costs, broaden competition, and attract new savers to invest in government securities.
It aims to attract a new segment of investors interested in Sharia-compliant financial instruments, which will contribute to diversifying funding sources and extending the maturity of the debt portfolio.
Oversubscribed five times, the average yield for the sovereign sukuk was 21.56%, marking a decrease of 26.2 basis points from the indicative yield of 21.82% for conventional bonds issued the previous week.
The average yield for the sukuk was nearly 14.3 basis points lower than that of treasury bonds issued on the same day and with the same maturity, which were accepted at an average yield of 21.703%.
The issue was conducted in the primary market through a public offering, with the participation of 16 banks. This is besides four Islamic banks operating in Egypt: Faisal Islamic Bank, Abu Dhabi Islamic Bank (ADIB), Al Baraka Bank, and Kuwait Finance House.
The ministry also established a public program for sovereign sukuk issuances in the local market, with an Ijara structure compliant with the principles of Islamic sharia.
The program's size stood at EGP 200 billion, through which several sovereign sukuk issuances will be implemented.
This initiative aligns with the ministry’s strategy to broaden the investor base and reduce debt servicing costs.
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