Egypt Seeks $504 Million From Bonds as Yields Drop

Egypt plans to sell three-year bonds today ahead of the trial of former President Hosni Mubarak and as the North African nation’s 10-year dollar notes trade near a six-month high.

The Ministry of Finance aims to raise 3 billion Egyptian pounds ($504 million) from the sale, according to Central Bank of Egypt data on Bloomberg. It raised a similar amount from the auction of two-year notes last week, the first such sale since a popular revolted ousted Mubarak in February, paying a coupon of 13.1 percent. The yield on one-year treasury bills has retreated from a 31-month high in June to 12.847 at an auction on July 28.

“The three-year issuance should be well covered because we’re still talking about a medium-term investment in the absence of better opportunities for banks,” said Mohamed Kotb, Cairo-based asset management director at Naeem Financial Investments. “We expect most buyers to be local banks.”

Egypt increased its reliance on short-term debt since the start of the popular uprising against Mubarak in January, having canceled 19.5 billion pounds in bond sales until last week’s issuance. The trial of Mubarak, his sons Alaa and Gamal, former Interior Minister Habibi el-Adly and others will begin in Cairo on Aug. 3, the Middle East News Agency reported July 28, citing Mohamed Manie, assistant to the justice minister.