Egypt Offers Euro T-Bills as Unrest Drives Local Yields Higher

Egypt will offer 500 million euros ($668 million) at an auction of treasury bills to cover debt issued last year after yields rose amid political unrest.

The government has 513.3 million euros of one-year notes maturing tomorrow that were sold at an average yield of 3.25 percent, according to data compiled by Bloomberg. Egypt will also seek to raise a combined 3 billion Egyptian pounds ($429 million) of three- and seven-year treasury bonds.

Borrowing costs in the most-populous Arab country are rising as the government continued to arrest Islamists amid a crackdown that started with the violent break-up of sit-ins in Cairo Aug. 14, killing about 1,000 people. Yields on local-currency T-bills rose for a second week at an auction yesterday. The average three-month yield has advanced 35 basis points from a 28-month low at the Aug. 12 auction to 11.61 percent.

Egypt had 53.3 billion pounds of outstanding local dollar and euro debt at the end of March, according to the most-recent central bank data. The country started selling foreign-currency debt locally in 2011 to replenish dwindling foreign reserves. The yield on the nation’s $1 billion of benchmark 5.75 percent eurobonds due in April 2020 retreated four basis points, or 0.04 of a percentage point, to 9.01 percent as of 10:03 a.m. in Cairo. The pound was little changed at 6.9868 a dollar.

Police arrested Osama Yaseen, a member of the Muslim Brotherhood and Youth Minister under former President Mohamed Mursi, along with the secretary to the group’s deputy head Khairat el-Shater, the state-run Middle East News Agency reported today. The Brotherhood, Mursi’s main backers, saw el-Shater and its spiritual leader Mohamed Badie stand trial yesterday on charges of inciting violence.

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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