Egypt plans to sell $1.1bn of bills before IMF loan talks

Egypt plans to raise 6.5 billion Egyptian pounds ($1.1bn) selling treasury bills today before a meeting with the International Monetary Fund to discuss loans.

The North African country will seek bids for 3bn pounds of six-month bills and 3.5bn pounds of one-year securities, according to central bank data on Bloomberg. The average yield on one-year notes has increased at the previous 15 auctions to 15.91 per cent at the February 2 sale, the highest since Bloomberg started tracking the data in 2006.

Pressure on funds at local banks after the withdrawal of foreign investors from the domestic bond market over the past year has increased government borrowing costs and hampered its ability to raise money. The finance ministry fell 31 per cent short of its debt-sale target in January.

Egypt will tell the IMF that it completed an economic program “through which it will seek” the $3.2bn loan, Planning Minister Fayza Aboulnaga said yesterday. The IMF mission will return to Cairo on February 12, having received the country’s formal request for aid during a visit last month.

The yield on Egypt’s 5.75 per cent dollar bonds due in 2020 advanced three basis points, or 0.03 percentage point, to 7.21 per cent at 11:55 am in Cairo, according to prices compiled by Bloomberg. The pound was unchanged at 6.0333 a dollar.