Egypt Raises Repo Offering to $2.2 Billion as Local Yields Rise

Egypt’s central bank will offer 13 billion pounds ($2.2 billion) in repurchase agreements today, the most this quarter, after local-currency debt yields rose amid an increase in government security sales.

The contracts, or repos, allow government security holders to sell them back to the central bank for a week to access funds at a rate of 9.25 percent, according to Central Bank of Egypt data on Bloomberg. The regulator offered repos valued at 5 billion pounds last week and received bids for 5.77 billion.

Egypt plans to raise 24.5 billion pounds in T-bill and bond sales this week, the most of any in the quarter. Yields on one- year and nine-month treasury bill advanced at the last auction to 13.85 percent and 13.84 percent respectively, near their highest levels since November 2008.

The country’s credit default risk rose for a third day after Moody Investors Service cut the country’s credit rating on Oct. 27 to B1, four levels below investment grade. Five-year credit default swaps climbed five basis points to 420, according to data provider CMA. CMA is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

Egypt’s 5.75 percent 10-year dollar bond due April 2020 slumped, pushing the yield 11 basis points, or 0.11 percentage point, higher to 5.77 percent at 11:43 a.m. in Cairo. The pound was little changed at 5.9682 per dollar.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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