Outstanding balances of local currency treasury bonds owed by the government at the end of June stand at approximately EGP 597bn, according to the Ministry of Finance. In addition, other bonds were issued in US dollars in the international market amounting to $8.75bn.
The ministry explained in a new report that there are two types of bonds in the Egyptian pound. The first type of bonds is with interest and coupons, and amounts to around EGP 537.7bn, with an average interest rate of 13.407%.
The other type are Zero-Coupon bonds, which reached approximately EGP 59.3bn, with the average interest rate of 11.92%.
The balances of the first type of bonds are to be paid-off during the period between 20 July 2015 and 12 May 2025. Zero-Coupon bonds, meanwhile, will be paid-off during the period between 7 July 2015 and 28 January 2017.
The Ministry of Finance further clarified that bonds worth $3bn are to be paid by 17 December 2016, with an average interest rate of 3.5%. Moreover, other bonds launched on the international money markets, worth $5.75bn, which will be paid during the period between 15 September 2015 and 29 April 2040. The average interest rate of these bonds amounts to 5.1414%.
The government issued bonds on 11 June worth $1.5bn on international money markets.
Banks working in the Egyptian market form the biggest sector investing in government-launched treasury bonds and bills on a regular basis, to cover the state’s general budget deficit.
These bonds and bills are launched through 15 banks participating in the Primary Dealers system in the primary markets. These banks resell some of the bonds and bills in the secondary market to the individual investors, beside local and international institutions.
Banks participating in that system include the National Bank of Egypt, Banque Misr, Banque Du Caire, CIB, Citi Bank, HSBC-Egypt, Misr Iran Development Bank, QNB, Credit Agricole Egypt, Barclays Bank Egypt, Bank of Alexandria (Intesa Sanpaolo), Arab African International Bank, Export Development Bank of Egypt, Suez Canal, and Arab Bank-Egypt.