Bloomberg News

Egypt Offers $2.2 Billion in Debt; 2020 Bond Yield Declines

February 15, 2012

Feb. 15 (Bloomberg) -- Egypt will offer 13.5 billion pounds ($2.2 billion) in debt over the next week after the finance ministry assured investors it would “safeguard” the currency’s exchange rate.

Domestic borrowing costs for the North African country are at record highs as foreign investors withdrew amid the turmoil that followed the ouster of President Hosni Mubarak a year ago. The yield on one-year treasury bills climbed for the 16th consecutive auction last week to 15.975 percent, the highest since Bloomberg started tracking the data in 2006.

Finance Minister Momtaz el-Saieed and the central bank both denied a newspaper report that cited an unidentified central bank official as saying he expected the dollar to strengthen in the “coming short period” by 5 percent against the pound. “We’ve increased our efforts to raise money from Egyptians abroad,” el-Saieed said yesterday. “We’re offering certificates of deposits and land, and we expect these dollars will help stabilize the situation.”

The yield on Egypt’s 5.75 percent dollar bonds due in 2020 retreated for a second day, losing one basis point, or 0.01 of a percentage point, to 7.22 percent at 12:09 p.m. in Cairo, according to prices compiled by Bloomberg. The rate dropped 12 basis points yesterday after five days of gains. The pound was little changed at 6.0355 a dollar.

The Arab country will seek bids for 3.5 billion pounds each of six- and twelve-month securities tomorrow and seek bids for the same amount in nine-month notes on Feb. 19, according to central bank data on Bloomberg. It will offer five- and seven- year bonds valued at 2 billion pounds and 1 billion pounds, respectively on Feb. 20, the data show.

--Editors: Claudia Maedler, Shanthy Nambiar

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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