Bloomberg News

Egypt Dollar Yield Drops on Higher Demand; Dollar Bonds Fall

May 15, 2012

Egypt sold $1.013 billion of dollar- denominated treasury bills today, exceeding its $750 million target as demand drove the yield to a record low. The nation’s 2020 dollar bond declined for a third day.

The average yield on the one-year notes fell to 3.706 percent from 3.844 percent at the last sale of similar-maturity notes in February, according to an e-mailed statement from the central bank. The North African country received bids for the securities that surpassed the amount offered by 2.5 times, it said. Egypt has raised $5.293 billion from five sales of 12- month dollar bills since November.

The Ministry of Finance, on whose behalf the central bank holds government security auctions, accepted more bids than it had planned “due to increased appetite by local financial institutions,” according to the regulator’s statement.

The country expects to sign a $3.2 billion loan agreement with the IMF around the beginning of June, state-run Al-Ahram reported today, citing Finance Minister Momtaz el-Saieed. The first part of the loan could be disbursed around July 1, it said. El-Saieed said in April the signing would take place that month after the government obtained parliament’s approval.

One-year local-currency bills yielded an average 15.85 percent at their last sale on May 10. Rising yields on pound- denominated debt have forced the country to fall 25 percent short of meeting its 36.5 billion-pound ($6 billion) fundraising goal at sales of treasury bills and bonds this month.

The yield on the 5.75 percent dollar bonds due 2020 rose three basis points, or 0.03 percentage point, to 6.95 percent at 1:52 p.m. in Cairo, according to prices compiled by Bloomberg. That’s the highest level on a closing basis in more than a month. The Egyptian pound weakened 0.1 percent to 6.037 a dollar.

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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