Monday 23 May 2011

Egypt Plans to Raise $1 Billion From Sale of Eurobond as Budget Gap Widens - Bloomberg

Egypt plans to raise $1 billion by selling Eurobonds this year to diversify borrowing and finance a widening budget deficit after its economy was rocked by the worst political crisis in 30 years.

The five-year bonds will be backed by a U.S. “sovereign guarantee,” Finance Minister Samir Radwan said by telephone from Cairo today. “We should tap the market quickly. We need to diversify because the local market is squeezed.”

Egypt’s budget gap may widen to the highest level in more than a decade in 2012 after a popular revolt ended the three- decade rule of President Hosni Mubarak, according to the Ministry of Finance. The turmoil prompted tourists to flee, lowered the country’s credit ratings and raised borrowing costs. President Barack Obama promised last week $2 billion in loan guarantees and debt forgiveness.

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