Jordan issues Eurbonds worth $1.25B at 7.5% coupon rate

On Apr 5, 2023

The Ministry of Finance and the Central Bank of Jordan on Tuesday completed the issuance of Eurobonds in global markets, with a value of $1.250 billion, at a fixed coupon rate of 7.5 per cent, due in January 13, 2029.

In 2023, the Ministry of Finance managed to reduce the coupon rate by 25 basis points in comparison with 2022, when the coupon rate stood at 7.75 per cent, despite the US Federal Reserve raising interest seven times since the 2022 issue.

Finance Minister Mohamad Al-Ississ said that the issuance aimed for a subscription volume of $750 million, but offers submitted by investors amounted to more than $4.7 billion, six times the target volume.

“This is a testament to the market believing in Jordan’s transformation towards a prudent, equitable fiscal path in recent years,” Al-Ississ told The Jordan Times.

“A number of emerging markets were unable to issue Eurobonds in these global conditions, showcasing the real impact of maintaining macrostability,” the minister noted.

The number of subscribers exceeded 230, including some of the most important and largest global investment houses in the US, the UK Europe, Asia and the Gulf Cooperation Council countries.

Many investors praised the financial and monetary stability in Jordan despite the state of global economic instability during the previous years, which reduced the risk factor for Jordan and thus the interest of bonds.

Investors said that Jordan was able to fulfil its financial reform promises during the past years, which maintained economic stability.

Central Bank Governor Adel Sharkas indicated that the high demand for issuing Eurobonds reflects the confidence of international investors in Jordan’s stability and wise leadership, in addition to the solid fundamentals of the Jordanian economy, supported by its prudent fiscal and monetary policies.

This issuance comes within the financing budget included in the General Budget Law for the year 2023, which means that it will not go to furthering Jordan’s debt.