Egypt - Ahmed Kouchouk, Deputy Minister of Finance for Financial Policies, has said that the three-year Panda bonds that the government issued on Monday attracted a large number of major Chinese institutions, as the subscription was open only to Chinese entities.

The Ministry of Finance issued sustainable Panda international bonds on the Chinese financial market worth CNY 3.5bn, equivalent to $500m, with an annual yield of 3.5% for three years.

Kouchouk told Daily News Egypt that the issuance serves as a benchmark for future issues in the Chinese markets, adding that it is the first offering of panda bonds in the Chinese market by a country from the Middle East and Africa, and also the largest issuance by a country in the Chinese panda market.

He added that the joint guarantee from the Asian Infrastructure Bank and the African Development Bank helped in securing a good annual return of 3.51%. He said that the Bank of China and HSBC acted as financial advisors for the issuance.

A statement from the Ministry of Finance on Monday said that the issuance was the first panda bond in Africa, and will be used to finance sustainable development projects, including eco-friendly agriculture, clean transportation, water sustainability management and waste treatment, infrastructure projects, digital infrastructure, and renewable energy.

The Bank of China said, on its website, that the guarantee covers both the principal and interest. This is consistent with previous statements by the Minister of Finance to Daily News Egypt, who revealed at the time that the Asian Bank’s guarantee would exceed $200m, in addition to the $345m guarantee by the African Development Bank.

According to Daily News Egypt’s calculations, the interest value is about $52.5m, which means that the total guarantee is around $552.5m, implying that the coverage of the Asian Infrastructure Investment Bank is about $207.5m.

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