The size of outstanding balances of treasury bonds in Egyptian pounds owed by the government reached approximately EGP 747.92bn as of the end of October 2016, according to the Ministry of Finance.
The ministry said in a recent report that there are two kinds of bonds in Egyptian pounds. The first kind is the bonds with returns and coupons, of which their balance at the ministry is about EGP 695.016bn and their average return is 13.021%.
These bonds were issued between 12 February 2008 and 6 September 2016; the return on these bonds varies between 9.15% and 17.20%.
According to the Ministry of Finance, the balances of the second kind of bonds, the “zero coupon” bonds, are approximately EGP 52.908bn, while their average return is 12.523%.
These bonds were issued between 28 January 2014 and 4 October 2016; their average return varies between 11.822% and 16.497%.
The ministry said that the bonds with return and coupons are decided to be paid between 3 December 2016 and 5 July 2026, while the payment of the “zero coupon” bonds began on 1 November and will continue until 3 April 2018.
The ministry’s report addressed also that there are bonds worth $3bn to be paid on 17 December; however, Daily News Egypt did not receive confirmation from the Central Bank of Egypt (CBE) on whether or not these bonds were actually paid.
The average return on these bonds is 3.5%; they were issued on 17 December 2013 to be paid in full in three years.
Besides these bonds, there are another $3.5bn bonds issued in the international capital markets including $500m in bonds that will be paid on 1 June, $1bn in bonds will be paid on 29 April 2020, another $1bn in bonds will be paid on 11 June 2025, and $500m in bonds will be paid on 29 April 2040.
These bonds were issued between 1 June 2012 and 11 June 2015; their returns are 5%, 5.75%, 5.875%, 6.875%, respectively, while their average return is 5.857%.
Banks operating in the Egyptian market are the largest investors in the treasury bonds and bills the government issues regularly to cover the deficit of the state’s general budget.
These bonds and bills are issued through 15 banks participating in the primary dealers system in the primary market. Also, these banks sell a portion of these bonds and bills in the secondary market to individual investors as well as local and foreign institutions.
The list of the banks participating in that system includes the National Bank of Egypt, Banque Misr, Banque Du Caire, Commercial International Bank, Citibank, HSBC Egypt, Misr Iran Development Bank, QNB, Crédit Agricole Egypt, the Moroccan Attijariwafa bank (formerly Barclays Bank Egypt), Bank of Alexandria Intesa Sanpaolo, Arab African International Bank, Export Development Bank of Egypt, Suez Canal Bank, and Arab Bank – Egypt.
