The offering has already attracted over $9 billion in investor orders, reflecting robust demand for the country’s Sharia-compliant sovereign debt instruments, it explained.
Egypt is set to raise $1.5 billion through a dual-tranche sukuk issuance scheduled for Tuesday, October 7, 2025, according to a statement from the Ministry of Finance.
The offering has already attracted over $9 billion in investor orders, reflecting robust demand for the country’s Sharia-compliant sovereign debt instruments, it explained.
The issuance comprises two sukuk tranches: a $700 million 3.5-year note maturing in 2029 with a yield of 6.375%, and an $800 million 7-year note maturing in 2032 with a 7.950% yield. The combined average cost of financing stands at 7.2%, notably lower than the 7.5% yield on Egypt’s five-year Eurobonds currently trading on the secondary market.
According to the ministry, the pricing of both tranches was favorable. The shorter-term sukuk was priced around 20 basis points below comparable bonds in the secondary market, while the longer tranche saw a 35 basis point discount, highlighting investor confidence in Egypt’s credit profile.
Officials noted that the transaction aligns with the government’s broader debt strategy aimed at reducing borrowing costs, diversifying funding sources, and extending debt maturities.
The issuance also supports Egypt's long-term fiscal goal of gradually reducing external debt in a sustainable manner, with the government targeting annual debt reductions of $1 billion to $2 billion under its five-year Narrative for Economic Development.
Sukuk, often referred to as Islamic bonds, are structured to comply with Islamic finance principles, which prohibit interest payments. Instead, investors receive income generated from tangible assets or projects linked to the underlying structure of the sukuk. This form of financing is increasingly popular among both Islamic and conventional investors looking for diversification.
Earlier in FY2024/2025, the Ministry of Finance completed a $1 billion private placement, its second sovereign sukuk following a $1.5 billion debut in February 2023.
The announcement comes at a pivotal time, as Egypt prepares for an upcoming International Monetary Fund (IMF) mission this week to review progress under its $8 billion Extended Fund Facility (EFF) program. The outcome of the fifth and sixth reviews could influence the pace and scale of future reforms and borrowing needs.
Globally, sukuk are gaining momentum. According to Fitch Ratings, outstanding sukuk debt is expected to exceed $1 trillion by the end of 2025. In 2024, sukuk accounted for 12% of all USD-denominated emerging market debt issuance (excluding China).
