On 14 February, the Arab world’s most populous country issued $4 billion Eurobonds, which were oversubscribed three times with an order book that exceeded $12 billion during the first hours of issuance.
The research company highlighted that the North African nation’s external debt has two sides: a bright side and another that calls for caution.
The bright side is represented in lower borrowing costs, the report indicated, adding that “Egypt’s recent issue yields reflect a noticeable improvement, more so in the longer maturities.”
Short-term external debt slightly fell in absolute and relative terms during the period starting the third quarter of financial year 2016/2017 to Q1-2017/2018, which should ease pressures on foreign currency liquidity in the short term, the report indicated.
On the other hand, the hike in external debt should be cautiously observed, pointing out that external debt has almost doubled in five years to reach $81 billion in Q1-2017/2018 from $43 billion in Q1-2017/2018.
“A higher external debt requires an above-average performance of GDP growth, current account, and financial performance,” the report continued.