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Egypt seeks to raise $1bn from issuance of first Islamic bonds in June

Egypt plans to raise as much as US$1 billion by June from the sale of its first Islamic bonds.

Egypt plans to raise as much as US$1 billion by June from the sale of its first Islamic bonds as the government anticipates a return to political stability will soften the blow of five credit rating cuts.

The cabinet has completed a draft law to allow sukuk sales, incorporating revisions by the ruling Freedom and Justice Party and Sharia scholar Hussein Hamed Hassan, said Ahmed El Naggar, adviser to Finance Minister El Morsi Hegazi.

Officials have compiled a list of about 25 projects that could be used as assets to back future sales, Mr El Naggar said.

"The international market is waiting for Egypt's sukuk sale," saidMr El Naggar, an FJP official who became a ministerial adviser in a cabinet reshuffle last month. "I hope to start with two sales, one for domestic investors and one abroad."

Chaos that accompanied the 2011 uprising that toppled President Hosni Mubarak has shut Egypt out of international debt markets as Standard & Poor's lowered the country's credit rating to B-, the same non-investment grade as Greece and Pakistan. The government last sold dollar bonds in 2010, raising $1.5bn in 10-year and 30-year notes.

Bouts of violence and political unrest that have disrupted Egypt's transition to democracy have delayed attempts to boost the Sharia-compliant financial industry in the most populous Arab country. The upper house of parliament, which is dominated by the FJP, is expected to debate the draft sukuk law this week, Mr El Naggar said. President Mohammed Morsi plans to hold elections for the lower house in April and has ordered the new assembly to convene in July.

 

* Bloomberg News

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