January 13, 2019 / 8:59 AM / in 2 months

UPDATE 2-Egypt plans $2 billion worth of Samurai bonds -government sources

(Adds comment from finance minister)

CAIRO, Jan 13 (Reuters) - Egypt intends to issue $2 billion worth of Japanese yen-denominated bonds in the coming week, two government sources said, part of up to $7 billion in planned foreign bond offers.

Finance Minister Mohamed Maait said his ministry had received cabinet approval for $3 billion to $7 billion of foreign bond offers.

He did not say what currency bonds would be sold in or specify the time frame, though he said Egypt was looking “to diversify currencies, products and markets to find good financing alternatives”.

“The ministry has got approval from the cabinet to offer international bonds and the procedures have started,” Maait told reporters on the sidelines of an investment conference.

“The value will not be less than $3 billion and will not exceed $7 billion.”

Egypt has struggled to recover from years of turmoil after the 2011 pro-democracy uprising, and has borrowed heavily from abroad since it began an economic reform programme backed by the International Monetary Fund (IMF) in late 2016.

Maait said in December that Egypt was aiming for at least two foreign currency bond issues in the first quarter of 2019.

Egyptian officials have previously said Japanese yen and Chinese yuan were two of the currencies they were considering as the country looks to sell debt in currencies other than the euro and U.S. dollar.

Egypt raised 2 billion euros in bonds in April 2018, its first issue in the single currency.

Proceeds from the issue of so-called Samurai bonds will be used to repay debts of state oil company Egyptian General Petroleum Corp (EGPC), according to one of the government sources, speaking on condition of anonymity.

Ahead of the expected bond issue, Deputy Finance Minister Ahmed Kouchouk went to Japan last week as part of a promotional roadshow that includes Singapore, one of the sources said. Neither Maait nor Kouchouk responded to requests for comment.

Egypt’s foreign debt stood at $92.64 billion at the end of the financial year in June. Its borrowing requirement for the repayment of external debt is $10.51 billion in the current financial year. (Reporting by Ehab Farouk Writing by Aidan Lewis Editing by Mark Heinrich)

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