CAIRO: Egypt aims to tap the Eurobond market for $1 billion-1.5 billion in weeks, the first such issue since 2007, the Finance Ministry said on Friday.
The markets are favorable. There is a huge demand from investors in London, New York and Asia, Finance Minister Youssef Boutros-Ghali told Reuters. We plan to test the outer limits of maturities. We are testing 20 to 30 years.
We are contemplating $1 billion to $1.5 billion, he said.
Egypt has emerged from the world financial crisis relatively unscathed. Growth fell from the 7 percent a year it managed before the downturn but held near 5 percent during the crisis.
The economy has been helped by banks flush with cash because of conservative lending policies and relatively resilient tourism receipts, alongside earnings from the Suez Canal and remittances from workers abroad.
Boutros-Ghali said the issue was not designed to fund the budget deficit. I am doing that very comfortably domestically, he said.
The deficit for the current fiscal year, to the end of June, was projected to be LE 98 billion ($18 billion), or 8.4 percent of predicted gross domestic product, he said.
But Boutros-Ghali said this was based on growth of 4.7 percent, and it now looked like the economy would likely grow at 5.1 or 5.2 percent. Thus, the deficit would be lower, he said.
Mohamed Assaad, adviser to the minister on public debt management, said there was decent appetite for Egyptian international paper because it was not a regular issuer and did not have a lot of outstanding Eurobonds.
He added that it would be the first issue since 2007.
Assaad said Egypt had $1 billion maturing in 2011, $1.25 billion maturing in 2015 and which was guaranteed by the US government and LE 6 billion ($1.1 billion) of global notes maturing in 2012.
Boutros-Ghali said no price had been set for the new issue but it is looking very attractive. He said the issue was coming within weeks and was to refinance 10-year Eurobonds issued in May 2001.
Assaad said the launch may be in the coming seven to eight weeks, something like that.
