Egypt inks $2 billion loan with regional, international banks

Egypt signed a $2 billion conventional and Islamic loan with several regional and international banks under a deal coordinated by two UAE lenders, the finance ministry said in a statement on Monday.

Emirates NBD Capital, and First Abu Dhabi Bank (FAD) acted as joint coordinators and lead managers of the deal, according to the statement.

The loan is dedicated for “financing the state budget and supporting the Egyptian economy in order to maintain its strong path in the face of fluctuations prevailing in global markets”, the statement said.

The loan was approved by the Egyptian parliament, the statement added.

A parliamentary document obtained by Reuters showed Egypt initialised on July 20 the deal with Emirates NBD and FAD to get a one-year, $2 billion loan in two tranches to fill the gap in its 2020/2021 budget wrought by the coronavirus pandemic.

The first tranche is a conventional facility worth $1.490 billion and the second is an Islamic facility worth $510 million, the document read.

“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,” a banking source told Reuters.