Cairo: Egypt received $12 billion in orders for the North African country's first overseas sale of dollar bonds in nine years, according to a banker familiar with the transaction.
The bonds are expected to be priced midday New York time, said the banker, who declined to be identified because terms aren't set.
The country may sell $1 billion of 10-year notes to yield about 5.875 per cent and $500 million of 30-year bonds to yield about 7 per cent, said another banker yesterday. It's the country's first 30-year bond, according to Reham Al Desoki, economist at Beltone Fin-ancial in Cairo.
Egypt is selling securities after the extra yield investors demand to hold emerging-market securities rather than Treasuries sank to 2.309 percentage points April 15, the lowest level since December 2007. The government plans to reduce the budget deficit estimated at 7.9 per cent of gross domestic product in the fiscal year starting July, from a projected 8.4 per cent this year, Finance Minister Youssef Boutros-Ghali said on March 4.
"The 30-year bond is partly to diversify the sources of financing and extend debt duration," said Mohammad Abu Basha, an economist at EFG-Hermes Holding SAE in Cairo. The budget shortfall is "mostly financed by short-term domestic" treasury bills, he said.
HSBC Holdings Plc and Morgan Stanley are managing the debt offering.
The nation's debt is rated Ba1 by Moody's Investors Service and BB+ by Standard & Poor's and Fitch.