Egypt plans to sell at least $1 billion of 10-year bonds that will be priced to yield 5.875 per cent in its first sale of securities in global markets in nine years, according to a banker involved in the transaction. HSBC Holdings Plc and Morgan Stanley are managing the debt offering and the roadshow will end today, according to an investor familiar with the offering, who asked not to be identified as the deal hasn't been completed. The government is tapping international debt markets to help fund its budget deficit following advice from the International Monetary Fund. The country is aiming to reduce the shortfall to 7.9 percent of gross domestic product in the next fiscal year starting July, from a projected 8.4 per cent this year, Finance Minister Youssef Boutros-Ghali said March 4. Mohamed Assaad, public debt adviser to Egypt's finance minister, declined to comment on the sale. Emerging-market bond funds received $1.8 billion in the week to April 14, lifting 2010 inflows to a record, as high- yielding debt attracted global investors, EPFR Global said April 16. The difference in yield to own bonds in developing countries instead of Treasuries increased two basis points to 2.39 percentage points today, according to JPMorgan Chase & Co.'s EMBI Plus Index. The spread was 2.74 points at the end of 2009. Egypt issued $1.5 billion of bonds in June 2001, with the 10-year securities priced to yield 335 basis points more than US. Treasuries of similar maturity, according to data compiled by Bloomberg. The five-year bonds were sold at 275 basis points more than Treasuries. Moody's Investors Service rates Egypt's debt at Ba1, one level below investment grade. The country's bonds are ranked an equivalent BB+ by Standard & Poor's and Fitch Ratings.
