Egypt Pulls Bond Sale as Suez Canal CDs Prompt Yield Demands

Egypt scrapped a bond auction for the first time this quarter amid concern banks would drive up borrowing costs as government certificates financing the Suez Canal’s expansion compete for depositor funds.

The central bank, which conducts debt sales on behalf of the Finance Ministry, called off today’s auction of 2 billion Egyptian pounds ($280 million) of five-and 10-year notes, according to data posted on Bloomberg. The announcement came after the government raised less than a fifth of the 6 billion pounds it sought yesterday. Bids at the sale of three- and nine-month securities more than covered the target, the data show, meaning the government probably rejected orders because yield demands were too high, according to Ahmed Kheir Eldin, a fixed income trader at Bank of Alexandria SAE.