Clifford Chance

Clifford Chance advises on Egypt’s second Samurai bond issuance

Global law firm Clifford Chance has advised the Ministry of Finance of the Arab Republic of Egypt on its second tranche of 5-year Samurai bonds worth US$500 million (JPY75 billion). Issued with a unique credit enhancement scheme, the bonds are guaranteed by Japanese commercial bank Sumitomo Mitsui Banking Corporation (SMBC), with Africa Finance Corporation (AFC) providing a guarantee to SMBC for Egypt's reimbursement obligations to SMBC.

Tokyo co-managing partner Reiko Sakimura said, “Given the continued low-interest rates in Japan, we've seen a notable increase in interest in the Japanese Samurai bond market. This includes African issuers who are keen to diversify and broaden their international investor base. We are delighted to have advised the Arab Republic of Egypt on its second tranche issuance, following our advisory role on its inaugural issuance of Samurai bonds in 2022."

Chihiro Ashizawa, Head of Capital Markets (Japanese Law) added, "The credit enhancement and reimbursement agreements for this bond issuance have a unique structure, where SMBC initially assumes Egypt's credit risk, but ultimately, AFC takes it on. This innovative financial structure highlights our expertise in cross-border transactions in sovereign capital markets and loan transactions, both in Japan and abroad."

Partner Reiko Sakimura was supported by a team in Tokyo including counsel Chihiro Ashizawa and associate Masato Fujinaka.

Clifford Chance has a track record of advising on matters related to Samurai bonds, including advising Egypt on its first Samurai bonds issuance, the Japan Bank for International Cooperation on its partial acquisition of publicly offered Samurai blue bonds issued by the Government of Indonesia, and its partial acquisition of SDG Samurai Bonds issued by the Government of the United Mexican States (Mexico).