If the Bond Market Could Decide, Egypt Would Be Set for Upgrade

With its finances in tatters, a credit upgrade was out of the question for Egypt before it secured an IMF loan agreement. Fast-forward six months, and it’s already won promotion in the bond market.

Egypt’s dollar bonds have sprung back this year, driving its borrowing costs to the lowest level since 2015. That has lifted the market perception of Egyptian risk above that of some ratings assessors. The nation’s debt has had an implied rating of B2 or better for almost three months, according to Moody’s Analytics, one level higher than its official grade.