Bloomberg News

Egypt Offers 3-Year T-Bonds as Brotherhood Backs IMF Loan Talks

August 27, 2012

Egypt will offer 2 billion Egyptian pounds ($328 million) of three-year treasury bonds today as the Muslim Brotherhood threw its support behind loan negotiations with the International Monetary Fund. The dollar bonds rose.

The North African country last sold similar-maturity notes at 16.21 percent on Aug. 16, according to central bank data on Bloomberg. The sale is part of a plan to raise a record 175 billion pounds this quarter.

The Brotherhood’s political arm, the Freedom and Justice Party, “understands the importance of the agreement with the IMF on the international level, and how it boosts” confidence, the group said in a statement posted on its Facebook page. Egypt is negotiating with the fund for as much as $4.8 billion in aid to help bridge its budget deficit and jump-start economic growth. The party is the country’s biggest.

The government has raised about 94 percent of the 121 billion pounds it has offered in securities since the start of the quarter as it tries to control yields. All debt sales in the period have received more bids than the amounts offered, according to central bank data on Bloomberg.

The nation’s 5.75 percent dollar bonds due in 2020 advanced for an eighth day, pushing the yield down three basis points, or 0.03 of a percentage point, to 5.46 percent at 10:38 a.m. in Cairo, according to data compiled by Bloomberg. That’s the lowest level on a closing basis since September 2011.

The pound, subject to a managed float, weakened 0.1 percent to 6.0917 a dollar, near the lowest level since December 2004.

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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