Egypt has issued its first local-currency sovereign sukuk, raising 3 billion Egyptian pounds, as part of efforts to diversify funding sources and cut borrowing costs, its finance ministry said in a statement on Tuesday. The three-year sukuk, structured under the Shariah-compliant Ijara (lease) model, was five times oversubscribed and priced at an average yield of 21.56 per cent, the ministry said in a statement. The yield was 26 basis points lower than comparable conventional bonds issued the previous week and 14 basis points below treasury bonds of the same maturity auctioned on the same day. The sale, conducted through the primary dealers system, saw participation from 16 conventional banks and Egypt's four Islamic banks — Faisal Islamic Bank, Abu Dhabi Islamic Bank, Al Baraka Bank, and Kuwait Finance House. The offering is the first under Egypt's 200 billion-pound domestic sukuk programme, which grants the instruments the same tax and accounting treatment as government Treasury bonds. The issuance is part of a broader debt management strategy to attract new categories of investors, extend debt maturities, and reduce the cost of financing. The government aims to draw greater participation from Shariah-compliant investors while advancing its goal of broadening the local debt market. The ministry added that the local sukuk issuance was part of its quarterly debt issuance plan, published on its official website. Attribution: Amwal Al Ghad English
