The Finance Ministry announced its plan to issue 24 treasury bills (T-bills) and bonds worth EGP 340bn in September, as part of its borrowing strategy for the first quarter of the fiscal year 2023/2024. The ministry aims to repay its previous debts and finance the budget deficit with the proceeds from the local market.
According to the ministry’s plan, 16 T-bills worth EGP 330bn will be offered with maturities ranging from 91 days to 364 days. The plan also includes eight bonds worth EGP 10bn with maturities of three, five, and seven years. Some of the bonds will have variable yields, while others will have zero coupon rates.
In detail, the plan includes 4 T-bill issuances worth EGP 91bn for a period of 91 days, and the same amount for EGP 75bn for a period of 182 days, and 4 issuances of EGP 69bn for a period of 273 days, and the same for 364 days at a value of EGP 95bn. The plan also includes 4 bond issuances for 3 years worth EGP 9bn, including two issuances worth EGP 1.5bn with variable yields; two 5-year issuances worth EGP 500m; and two 7-year issuances worth EGP 500m.
The T-bills and bonds are mainly purchased by banks operating in the Egyptian market, which are part of the “main dealers” system that participate in the primary market. The banks then resell some of the debt instruments in the secondary market to individual and institutional investors, both local and foreign.
The Finance Ministry reported that the outstanding balance of local T-bills and bonds reached about EGP 4.604trn in July 2023, of which EGP 2.292trn were T-bills and EGP 2.311trn were bonds. The ministry recently introduced variable-return bonds and zero-coupon bonds as new debt instruments to diversify its borrowing sources and reduce its interest payments.
