• First issuance attracts funds 3 times of its value and  interest rates decrease by 2%.

Within framework of Ministry of finance plan to diversify the government financial products , the ministry declared that it will arrange a new offering of zero coupon bonds next week ,this came after success of first bonds issuance last Monday estimated at 1 billion EGP . The Ministry received requests estimated at 3.164 billion EGP with coverage rate 3.11 times , which reflects strong desire from the banking sector towards the new issuance .

The Ministry explained that banks participating in the main dealers system of government financial securities presented competitiveness prices to attain such issue ,whereas average of the accepted interest rate reached  10.745% ,while maximum of  accepted interest reached 10.820% . Treasury bonds offering witnessed new regression /recede of the interest rate by 2% ,whereas interest rates of five year issuance decreased 2.9% besides the interest rates of ten years bonds decreased 1.6 %.

The ministry indicated that the maturity period of zero-coupon bonds is 18 months to meet banks need with instruments to help matching terms of  investment portfolios and to fill curve gaps of governmental securities yield to become  a connecting point between short –term treasury bills and short and long term treasury bonds, which serve pricing of government securities and increase liquidity.

(Source: Ministry of Finance)