Egypt Seeks $1.7 Billion In Debt Sales As Charter Vote Advances

Egypt plans to raise 10.5 billion Egyptian pounds ($1.7 billion) over the next week from Treasury bill sales as it prepares for the second round of a referendum on a new constitution.

The Arab world’s most populous nation is seeking 2.5 billion pounds in six-month notes and 3.5 billion pounds in one- year notes on Dec. 20. It also plans to raise 1 billion in three-month notes and 3.5 billion in nine-month debt on Dec. 23.

Egypt’s borrowing costs are falling after an initial surge in the aftermath of a decree on Nov. 22 that expanded President Mohamed Morsi’s powers, sparking nationwide protests and compelling the leader to rescind the edict. The average one-year yield has dropped 53 basis points in the last two auctions to 13.62 percent.

The initial round of the referendum on the constitution, the first since the ouster of President Hosni Mubarak almost two years ago, ended peacefully. About 57 percent of voters in 10 provinces on Dec. 15 approved the charter, according to the Muslim Brotherhood, Egypt’s biggest political organization, but opposition groups have also claimed victory.

The second round, which includes the country’s remaining 17 provinces, is scheduled for Dec. 22. The Islamist-backed charter has caused rifts between supporters and opposition groups, with opponents planning a rally later today to protest the constitution.

The yield on the nation’s 5.75 percent dollar-denominated bonds due in April 2020 edged 1 basis point higher to 5.96 percent today. The pound, subject to a managed float, was little changed today at 6.1686 to the dollar.

Bloomberg