Bloomberg News

Egypt Offers $818 Million Debt Amid Political Tensions

February 17, 2013

(Corrects amount in headline.)

Egypt will offer 5.5 billion Egyptian pounds ($818 million) at a debt auction today after the ruling Islamists met with opposition leaders in an attempt to resolve the political crisis.

The North African country will seek bids for 1.5 billion pounds of three-month securities and 4 billion pounds of nine- month notes, according to central bank data on Bloomberg. It sold similar-maturity bills last week at average yields of 12.87 percent and 13.97 percent, respectively.

Tensions between the Muslim Brotherhood and the secular opposition, which have turned violent and helped push the local currency to record lows, may be easing following a meeting between leaders from both sides yesterday. Saad El-Katatni, head of the Brotherhood’s Freedom and Justice Party, said he met with opposition leaders, including Nobel Laureate Mohamed ElBaradei, to “exchange view points on the current political situation,” without providing more detail.

Egypt’s pound has lost 8 percent to 6.7304 a dollar since the central bank started auctioning U.S. currency to local lenders in December to limit its access as foreign reserves declined. The dollar’s rate in the black market increased to 7.05 pounds today, according to the state-run Ahram Gate website. The average yield on nine-month debt has risen 18 basis points, or 0.18 of a percentage point, this year, according to data compiled by Bloomberg.

The yield on the government’s benchmark 5.75 percent dollar-denominated bonds due in April 2020 rose 11 basis points last week to 6.77 percent, near the highest level since June.

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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