Egypt’s borrowing costs increased as it raised $4bn from its first sale of international bonds since a currency devaluation in November, a person familiar with the deal said.
Africa’s third-biggest economy issued $1bn of 10 year notes at 7.5%, said the person, who asked not to be identified because the information is not public yet. That compares with a coupon of 5.875% for similar-maturity bonds in 2015. The government also sold $1.75bn of five-year notes at a yield of 6.125% and $1.25bn of 30-year securities at 8.5% Tuesday, according to the person.
Egypt floated its currency in November, slashing its value by half, in a bid to attract foreign investment and stimulate an economy that has suffered from shrinking business activity for 15 months. The country signed a $12bn International Monetary Fund loan in November, the biggest ever for a Middle Eastern nation, and needs to bridge a financing gap that the IMF estimates at $35bn for the next three years.
The bonds were “fairly generously priced compared to existing securities and to other similarly rated sovereigns like Pakistan and Sri Lanka,” Abdul Kadir Hussain, the head of fixed-income asset management at Arqaam Capital Ltd in Dubai, said in an e-mail. The sale “should alleviate some short-term pressures on the currency, although Egypt will have to continue the process of stabilizing and growing its domestic economy.”
BNP Paribas, Citigroup, JPMorgan Chase & Co and Natixis arranged the sale.


‘Egypt committed to repaying $3.5bn to foreign oil firms’


Reuters/London


Egypt is committed to repaying the $3.5bn it owes in arrears to foreign oil companies but a foreign currency shortage has made the drawing down of those debts more difficult, Petroleum Minister Tarek El-Molla has said.
“We are committed and we will continue decreasing the numbers as we have done over the last three years,” El-Molla told Reuters.
Insufficient foreign currency reserves mean that the repayment schedule was taking time, he said.
He said, however, Cairo was making monthly payments to foreign operators, enabling it to prevent overall debts from growing further.
El-Molla said Egypt would resort to the spot market and to inter-governmental deals to close the gap between its gas production and consumption through imports of liquefied natural gas.
State-run EGAS issued an import tender in late October for 96 LNG cargoes for delivery in 2017 and 2018, with an option to buy 12 additional cargoes in 2017. “As we go during the course of the year, we will see what are the remaining quantities that we need to close the balance of the month and the balance of the season,” he said. “Therefore, we’ll go on as we need and as it may require on smaller tenders or we might have some direct deals.”





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