Egypt, struggling to raise funds at local government debt auctions, is turning to international markets for the first time since a popular revolt in February ended the three-decade rule of President Hosni Mubarak.
Egypt’s 10-year dollar bonds, sold in April 2010 at a yield of 5.75 percent, fell yesterday, pushing up rates five basis points to 5.92 percent after Finance Minister Samir Radwan said the government plans to “quickly” raise $1 billion through foreign notes. Radwan cited the need to diversify financing sources as the government sold 51 percent of the amount offered at a local auction and average yields on 252-day bills rose to 12.869 percent, the highest level since November 2008.
The government probably will pay more to borrow overseas than in 2010, said Win Thin, the head of emerging-market strategy at Brown Brothers Harriman & Co. The budget deficit may grow to the widest in more than a decade in 2012 after Mubarak’s fall led tourists to flee and agencies to cut the country’s credit ratings, according to the Ministry of Finance.
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