National Bank of Egypt in Talks for Dollar Bond Issue -sources

National Bank of Egypt (NBE), the oldest commercial lender in the North African country, has invited banks to pitch for arranger roles on a potential dollar-denominated bond issue, two banking sources told Reuters on Thursday.

A deal for the lender is expected to follow Egypt’s return to the international debt market in the second quarter after a five-year hiatus, the sources said.

No one at NBE was immediately available for comment.

The Egyptian government is also in the process of appointing banks for its planned bond issue, having asked potential arrangers to pitch for roles by March 17. The offering will be worth up to $2 billion, Finance Minister Hany Kadry Dimian told Reuters last month.

A successful deal by the sovereign is expected to encourage a number of Egyptian banks and companies, who face a shortage of hard currency and have been shut out of international debt markets since 2011, to attempt their own transactions.

They will be hoping to take advantage of the confidence a successful government deal would bring, building on an investment conference held in the country last weekend which saw tens of billions of dollars of new foreign investment announced.

NBE is looking for a deal of benchmark size, one of the sources said. For issuers with low credit ratings, such as NBE, benchmark size is usually understood to mean upwards of $300 million.

The bank also has a $600 million bond maturing in August that was originally sold in 2010 and carries a coupon of 5.25 percent.