Egypt meets debt sale goal at higher yield after rating cut
Pays average of 15.923% compared with 15.915% on February 5
Cairo: Egypt sold its target 3.5 billion Egyptian pounds (Dh2.1 billion) of nine-month treasury bills yesterday at a higher yield for the tenth straight auction after Standard & Poor's cut the country's credit ratings.
Egypt paid an average of 15.923 per cent, the highest since Bloomberg started tracking the data in 2006, compared with 15.915 per cent on February 5. Pressure on funds at local banks after the withdrawal of foreign investors from the domestic debt market over the last year has increased borrowing costs and hampered the government's ability to raise money.
S&P lowered on Friday the ratings on Egypt's long-term foreign and local-currency debt to B, five steps below investment grade, from B+. The outlook was negative, suggesting the next move may be another cut. It was the country's third downgrade at S&P in four months, which cited declining foreign reserves and political instability. Egypt's international reserves fell to $16.4 billion in January, the lowest level in more than seven years. The yield on Egypt's 5.75 per cent dollar bonds due in 2020 advanced four basis points, or 0.04 of a percentage point, to 7.32 per cent on Friday.
