Egypt sells five-year local currency bond

Egypt sold $1.05 billion worth of a five-year bond payable in dollars but denominated in Egyptian pounds, lead managers said on Thursday.The six billion Egyptian pound, 8.75 per cent coupon bond was priced at 99.504 Egyptian pounds and will pay investors a yield of 8.875 per cent, in the lower range of the initial price guidance provided by the banks leading the deal, Citigroup and JP Morgan.

The initial yield guidance was officially set in the 8.875-9 per cent area. “When they were doing the roadshow, they initially thought about trying for a yield in the 8.60 to 9 per cent area, but this was just testing the waters,” said a market source in London.

The deal will be settled on July 18 and the bond will mature on July 18, 2012.

Both Standard & Poor’s and Fitch Ratings give Egypt a BB+ credit rating while Moody’s rates Egypt BA1. All these ratings are one notch below investment grade.

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