CAIRO: Banque Misr expects to complete procedures next month to obtain a $250 million loan of three years duration, using it to strengthen the dollar resources of Egypt’s second-largest state lender, its chairman told Reuters on Monday.
The transaction is the first time the bank has sought to borrow from international banks since the North African country was hit by political unrest at the start of 2011.
It joins a number of Egyptian corporates and banks returning to the credit markets following an international sovereign bond issue in June as the government seeks foreign currency to help fund economic development and halt a black market which has pushed up inflation.
The Banque Misr loan will pay a margin of 3.2 percent, Mohamed Mahmoud Eletreby said by phone.
Two banking sources aware of the matter had earlier told Reuters the bank had begun marketing to lenders on Sunday, with the loan paying 2.9 percent over the London interbank offered rate – three-month LIBOR is currently at 0.33 percent.
Arab Banking Corp, Emirates NBD, HSBC, Mashreq and Union National Bank will arrange the loan, the banking sources, speaking on condition of anonymity as the information isn’t public.
The lender has been in talks with banks since June about issuing a loan.
Egyptian borrowers looking to tap international loan markets have been stymied by global volatility and shrinking liquidity in the Middle East, which is pushing loan pricing higher.
Banque du Caire has also been in talks with banks since July for a $200 million loan.