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By Yousef Saba and Patrick Werr
CAIRO, Feb 8 (Reuters) - Egypt sold $3.75 billion in bonds
on Monday to finance a portion of its fiscal deficit, with
maturities of five, 10 and 40 years, a document showed.
The yield was significantly lower than those of other bonds
recently issued by Egypt.
Egypt sold $750 million in five-year bonds at 3.875%, $1.5
billion in 10-year bonds at 5.875% and $1.5 billion in 40-year
notes at 7.5%, a document from one of the banks on the deal
showed. It received around $15 billion in orders.
"It looks like yields have dropped, by quite a bit,
actually," said Allen Sandeep of Naeem Brokerage.
A four-year bond issued in May 2020 yielded 5.75% compared
to 3.875% for the current five-year bond. A five-year Green bond
issued in September yielded 5.25%.
"It's a big drop. It shows that the risk premium has dropped
considerably," Sandeep said.
Demand on the latest bonds skewed to the longer-dated
tranches, the document showed.
Egypt has been tapping international debt markets as it
grapples with the coronavirus crisis, which caused tourism - a
key source of hard currency - to collapse.
The pandemic also led to a sharp fall in foreign direct
investment and weaker domestic economic activity.
Initial price guidance was 4.25% to 4.375% for the five-year
tranche, around 6.25% for the 10-year bonds and around 7.875%
for the 40-year notes.
Citi, First Abu Dhabi Bank, Goldman Sachs
International, HSBC, JPMorgan and
Standard Chartered are arranging the deal.
Egypt received $2.77 billion in emergency financing from
the International Monetary Fund (IMF) in May and another $5.2
billion Stand-By Arrangement from the IMF in June.
In May, it sold $5 billion in bonds with maturities of four,
12 and 30 years and in September sold $750 million in five-year
green bonds, the first by a sovereign in the region.
Last month, the IMF raised its growth forecast for Egypt's
economy in the financial year that will end in June to 2.8%,
matching the lower end of the government's own estimate and
citing a milder-than-expected contraction during the coronavirus
pandemic.
(Reporting by Yousef Saba in Dubai and by Patrick Werr in
Cairo; Editing by Kevin Liffey and Andrea Ricci)