Bloomberg News

Egypt Repo Bids Drop as Bond Demand Declines on High Yields

November 09, 2011

(Updates with debt sale in second paragraph.)

Nov. 9 (Bloomberg) -- Egypt accepted bids for 6.2 billion Egyptian pounds ($1.3 billion) in repurchase contracts, compared with 9.8 billion pounds in the last sale, as local investors needed less funding.

The contracts, or repos, allow government security holders to sell them back to the central bank to access funds for a week at 9.25 percent, according to central bank data on Bloomberg. Egypt raised 1 billion pounds out of a planned 7.5 billion pounds at a sale of three-, five- and seven-year bonds on Nov. 3 because investors demanded high yields. There were no debt sales this week because of a public holiday.

The repurchase facility was started in March to ease pressure on local banks, which became the primary investors in government securities after foreign investors withdrew amid the uprising that ousted Hosni Mubarak as president. The interest rate on repo contracts hasn’t changed since the start.

Egypt’s 5.75 percent 10-year dollar bond due April 2020 advanced, sending the yield five basis points, or 0.05 basis points, lower to 5.82 percent at 3:40 p.m. in Cairo. The pound was unchanged at 5.968 per dollar.

The country’s five-year credit default risk rose for a third day, advancing eight basis points to 449, the highest level on a closing basis in almost three weeks, according to CMA. The data provider is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

--Editors: Peter Branton, Stephen Kirkland

To contact the reporter on this story: Ahmed A Namatalla in Cairo at

To contact the editor responsible for this story: Claudia Maedler at

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