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Tuesday, 2 October 2018

Egypt sells T-bonds worth EGP 904 mn after four canceled auctions

Egypt sells north of EGP 900 mn in T-bonds after four canceled auctions: Egypt sold three- and seven-year treasury bonds worth EGP 903.8 mn yesterday after canceling four auctions in September due to high yields, according to CBE data. Yields on the three-year T-bonds were at 18.432%, while seven-year bonds carried yields of 18.431%. “The bank sold EGP 750 mn of three-year bonds, the same amount it was seeking. It sold EGP 153 mn of seven-year bonds, well under the EGP 500 mn worth it had sought,” Reuters notes. Finance Minister Mohamed Maait had previously said that Egypt would not accept yields beyond “logical limits” and noted last week that bond sales would continue to be called off if yields remained high.

Eurobond issuance in turbulent conditions indicates “urgent” financing needs: Declining appetite for EGP-denominated debt is pushing Egypt to look at the foreign debt market, but the timing of the Finance Ministry’s planned USD 5 bn eurobond issuance in “unfavourable conditions” could spell trouble for Egypt’s “deficit-cutting ambitions,” writes our friend Patrick Werr for Reuters. Resorting to an issuance in these conditions indicates that Egypt’s funding needs are “urgent,” a Cairo-based banker tells the newswire. A senior government source had told Enterprise last week that the issuance could go to market in the coming months, with a roadshow in Asian markets and Europe slated to kick off next week.

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