Following a three year absence from global financial markets, Egypt is now having a comeback with two Eurobonds for  a nominal value of US $ 1.5 billion issued in two tranches. A 10 year tranche  f...

  Following a three year absence from global financial markets, Egypt is now having a comeback with two Eurobonds for  a nominal value of US $ 1.5 billion issued in two tranches. A 10 year tranche  for US $ 1 billion carrying  5.75 % coupon and a  30year tranche  for US $ 0.5 billion with a 6. 875 % coupon. It is the first time  Egypt to  issue a 30 year Eurobond. At the beginning of a roadshow by Dr. Youssef Boutros Ghali, during April 2010 in New York, California and Boston, expectations were that the coupon on a 10 year bond will be 6.1% but once the issue was publicly announced, demand totaling more than $14 billion were filed by 258 investors from the United States and Europe, in addition to Egypt and Gulf countries. The Minister seized the opportunity to announce the issuance of a second and longer tranche for 30 years. The two tranches were issued at  0.25 % below expectations. Following the issue, the secondary market yields for Egypt’s Eurobond fell below Turkish yields with similar maturities. Observers have, therefore, commended the interest rate, nominal value and duration of this issuance, particularly the second $500 million tranche. Due to strong investor demand, bond prices rose by 1% as soon as they were traded in the secondary market. The timing of this Egyptian issuance testifies to the sound management of the Egyptian economy, given financial market fluctuations arising from the recent problems faced by Greece - whose bond yields rose to 9.5% - and the possibility of a similar scenario developing in Spain and Portugal, experts say.