Egypt Misses 1-Year T-Bill Goal for 3rd Week as Yields Rise

Egypt missed its fund-raising target for one-year treasury bills for the third week as the average yield on the securities rose to the highest level in almost three years.

The Arab country raised 1.4 billion Egyptian pounds ($235 million) out of the 3.5 billion it had sought at an auction today, according to data posted on the Ministry of Finance website. The average yield was 12.985 percent, the highest since November 2008. It sold the target 2.5 billion pounds in six- month treasury bills at an average yield of 12.552 percent, up from 12.481 percent last week.

“The government is firm on not allowing the yield on one- year notes to breach the 13 percent level, especially as it seeks to sell two-year floating bonds soon,” said Ahmed Kheir Eldin, fixed-income trader at Cairo-based Bank of Alexandria. “If investors can earn a good spread above six-month bills by buying one year notes, the two-year floating rate bonds will not be appealing.”

The Finance Ministry postponed the sale of two-year floating-rate bonds earlier this week as yields on treasury bills rose. The bonds would pay investors a spread, yet to be announced, over the yield on six-month treasury bills. The ministry sold two-year fixed-rated bonds on Aug. 15 at an average yield of 13.29 percent.