Bloomberg News

Egypt 2020 Dollar Bond Gains Ahead of IMF Loan Negotiations

October 25, 2011

(Updates bond yield in second paragraph.)

Oct. 25 (Bloomberg) -- Egypt’s 2020 dollar bond advanced, sending the yield to the lowest level in more than a month as the Arab country’s government was scheduled to restart loan talks with the International Monetary Fund.

The yield on Egypt’s 5.75 percent 10-year dollar bond due in 2020 fell six basis points, or 0.06 percentage point, to 5.75 percent at 4:15 p.m. in Cairo, the lowest level on a closing basis since Sept. 22.

An IMF delegation will visit Egypt this week for talks with the government, Finance Minister Hazem El Beblawi said Oct. 23. The government will restart discussion about a $3 billion loan, Al Ahram newspaper reported yesterday, citing International Cooperation Minister Fayza Aboulnaga. Egypt rejected a similar loan in June as public opposition to the fund mounted.

The fund is “very keen” to support the Egyptian government in the wake of the uprising that ousted former President Hosni Mubarak in February, its deputy managing director Nemat Shafik, said Oct. 23 in an interview.

Egypt is seeking to diversify its funding sources after reliance on treasury-bill sales to local banks has pushed local debt yields to the highest levels in almost three years. The country has approached Persian Gulf governments to subscribe to its securities and received a commitment from Saudi Arabia for a $500 million investment after Qatar provided $500 million in budgetary support earlier this month.

--Editor: Claudia Maedler

--Editor: Claudia Maedler

--Editors: Claudia Maedler, Inal Ersan

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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