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DUBAI - Egypt has hired banks for its debut sale of Islamic bonds denominated in U.S. dollars, a document on the deal showed on Friday.
A successful sukuk sale would help Egypt repay $1.25 billion in five-year Eurobonds that mature on Feb. 21.
Joint lead managers and bookrunners on the sukuk are Abu Dhabi Islamic Bank, Citi, Credit Agricole, Emirates NBD Capital, First Abu Dhabi Bank and HSBC. They will arrange investor calls starting on Friday, the document showed.
A sale of three-year sukuk of benchmark size - typically at least $500 million - will follow, subject to market conditions.
Egypt's finances, already unsteady, fell into crisis after the war in Ukraine triggered heavy foreign investment outflows from Egyptian financial markets. The crisis prompted Egypt to seek a four-year, $3 billion rescue plan with the International Monetary Fund that was finalised in December.
This month's maturing Eurobonds carried a fixed interest rate of 5.577%.
But analysts say it would be hard for Egypt to roll them over at anything close to this after the U.S. Federal Reserve's 4.5 percentage points in rate hikes over the last year and after Moody's downgraded Egypt's sovereign rating by one notch on Feb. 7.
Sukuk investors are also likely to demand higher yields, analysts added.
(Reporting by Yousef Saba and Patrick Werr; Editing by Muralikumar Anantharaman and Tomasz Janowski)