Egypt sold $750 mn in green bonds, maiden issuance was 5x oversubscribed

Egypt sold $750 million of the Middle East and North Africa’s first sovereign green bond, as it forges on with anti-pollution and renewable energy projects according to Bloomberg.

The issuance was nearly 5 times oversubscribed, attracting some $3.7 billion worth of orders for the bonds, pointing to growing appetites for climate-friendly securities worldwide.

Egypt sold the five-year US dollar notes at a yield of 5.25 percent, which were lower than opening target of about 5.75 percent by  50 bps.

The bonds will finance the development of Egypt’s $ 1.9 bn portfolio of green projects, including clean transportation, renewable energy and sustainable water management, according to Reuters

The offering attracted new investors, with a virtual roadshow “attended by many who are speaking to Egypt for the first time,” Reuters reports, citing an unnamed source familiar with the transaction.

Sustainability analysts and global investors were among those interested in the sale.

Recent market weakness over fears of a second covid-19 wave and “market indigestion” from the large number of new issuance could make investors more selective, Zeina Rizk, Arqaam Capital’s executive fixed income director said.

Egypt joins a growing green bond wave with Tuesday’s sale, as global investor appetite for sustainable financing surges. The assets of sustainable index mutual funds and exchange-traded funds have doubled to $250 billion in the past three years, according to Morningstar.