"Egypt’s credit risk headed for the biggest drop in more than two years and bonds gained as Saudi Arabia, the United Arab Emirates and Kuwait pledged $12 billion of aid and the new premier builds a government.
Five-year credit default swaps, which protect investors against potential non-payment of debt, fell 138 basis points to 679 as of 3:45 p.m. in Cairo, according to data provider CMA. That’s a 17 percent decline, the steepest on a closing basis since February 2011. The yield on the government’s benchmark 5.75 percent bonds due April 2020 decreased 32 basis points to 9.07 percent.
Egyptian shares also advanced after the aid pledges, which came on the same day that Hazem El-Beblawi was selected as interim prime minister to oversee a transitional government after the army removed President Mohamed Mursi a week ago. El-Beblawi, a former Finance Minister, and interim President Adly Mansour are confronting growing violence since the ouster, including the July 8 killing of dozens of the Mursi’s supporters by the army."
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