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Egypt announces 1st Islamic, conventional loan

Egypt announces 1st Islamic, conventional loan

ArabFinance: The Egyptian Ministry of Finance signed its first conventional and Islamic loan at a value of $2 billion (EGP 31.74 billion) to fund the state budget and support the local economy, according to an August 31st press release.

Regional and international banks participated in the financing, which was coordinated by the two UAE lenders Emirates NBD Capital and First Abu Dhabi Bank, the ministry added.

The UAE banking institutions were also the lead managers of the deal, the ministry said.

The loan was earlier approved by the Egyptian House of Representatives, the statement said.

A parliamentary document obtained by Reuters showed that the loan is allocated in two tranches to close the gap in the fiscal year 2020/21 budget amid the COVID-19 pandemic.

The first tranche is a conventional facility of $1.490 billion (EGP 23.64 billion), while the second is an Islamic facility of $510 million (EGP 8.09 billion), the document added.

A banking source told Reuters, "When they came to the market...on the back of COVID, the pricing was dislocated, the comparables were a bit on the high end. But they managed to convince the banks to commit to a tight level. And now...,it is in line with the market’s pricing.”

 

*At press time, the conversion rate is $1 = EGP 15.87

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