Egypt to Launch its Second Zero-Coupon Bonds Next Week
Egypt is planning to launch its second zero-coupon bonds worth EGP 3.164 billion next week.
Egypt’s Finance Ministry announced that it will be offering its second 18-month zero-coupon bonds worth EGP 3.164 billion next Monday Sept 23rd.
This comes in the wake of the Egyptian finance ministry’s successful attempt to raise its 18-month zero-coupon bonds at value of one billion pounds last Monday.
The Finance Ministry issued last Monday its first auction to sell zero-coupon treasury bonds, in which it raised EGP 1 billion at an average yield of 10.745%, amid remarkable turnout by banks.
The bond issue was covered more than three times. Yields on accepted bids ranged between 10.65% and 10.820%.
A zero coupon bond is an interest-free debt security, issued at a discount rate, which will render profit at maturity when the bond is redeemed.
18-Month Zero Coupon Notes Fact Sheet
Issuer: Ministry of Finance
– Security Type: Zero Coupon Bonds
– Issue Size: EGP 3.164 billion
– Maturity: 18 month (3 coupons periods, i.e. 182×3= 546)
– Central Depositary: Misr for Central Clearing, Depositary and
Registry (MCDR)
– Issue Date: September 23rd , 2013
– Maturity Date: March 23th, 2015
– Denomination: EGP 1000
– Minimum Bid: EGP 1000
– Bidding Style: Price basis (similar to current T-Bills auctions)
– Coupon Frequency: None
– Calculation Methodology: Discount Price Methodology
– Days convention: Act/ 365 days
– Auction Type: Multiple price auction (American Style)
– Submission of bids: Trough the eligible Primary Dealers.
– Settlement Date: T+1 for both primary and secondary market
– Settlement Price: Percent of the face value extended to the fifth decimal for both primary and secondary market.
– Redemption: Yield added to Par Value, single payment on maturity.
– Secondary Market: OTC, through Primary Dealers System.
– Liquidity Ratio: Will be included in the numerator.
– Tax Status: 20% withholding Tax (similar to current Treasury securities).
