GLA & Co. has acted as  Kuwaiti legal advisor for Deutsche Bank AG in a groundbreaking sovereign debt issuance that has allowed the Arab Republic of Egypt to secure a $500 million 7-year international commercial loan, insured by the Arab Investment and Export Credit Guarantee Corporation (“Dhaman”).  In this substantial transaction, Dhaman issued a Non-Honoring of Sovereign Financial Obligation (NHSO) insurance policy to provide coverage for the substantial loan extended to Egypt under the country’s Sustainable Financing Framework.

Mr. Abdullah Al Sabeeh, Director General of Dhaman, stated that it “demonstrates Dhaman’s commitment to its mandate and its contribution to the SDGs, as well as Egypt’s commitment to diversify its external financing sources through innovative blended finance solutions, with strong support from both Dhaman and the private insurance market.” He added, “Innovative credit-enhanced solutions in favor of Member Countries are one of the key pillars of Dhaman’s 2022-2026 strategic plan.”

Working with international legal counsel based in London, GLA & Co. played a pivotal role in this transaction by providing expert legal representation as a Kuwaiti legal advisor for Deutsche Bank AG regarding the insurance policy granted by Dhaman. This critical involvement ensured that the lending aspects were handled effectively, enabling Egypt to secure highly favorable financing terms that were significantly more advantageous than those available on the international bond market.  The transaction was able to highlight GLA & Co’s regional expertise as it maintains full offices in Kuwait, Egypt and other jurisdictions within the MENA region.

Dhaman’s credit insurance policy provided coverage for up to 95% of the scheduled principal and related interest, which, in turn, led to a reduced loan margin, resulting in substantial savings compared to current Eurobond yields. This transaction aligns with Egypt’s efforts to stabilize and reduce its cost of funding, extend maturities, and access new funding sources.

“GLA & Co. is honored to have played a pivotal role in this groundbreaking transaction that has facilitated Egypt’s access to favorable financing and furthered its commitment to sustainability and development. Our legal expertise in representing Deutsche Bank AG in the insurance policy granted by Dhaman reinforces our dedication to delivering innovative solutions that drive economic progress. We believe in the power of collaboration and are proud to have contributed to this historic achievement”, said Alex Saleh, Managing Partner of GLA & Co.

The GLA team was led by the Managing Partner Alex Saleh, Legal Director Maha El Meihy, and Associates, Khaled Al Makhazeem, Khaled Al Khashab and Jehan Saleh.

For additional information on the transaction, please see here.