The outstanding balances from treasury bonds in local currency owed by the government increased by EGP 16.94bn, to record EGP 726.97bn at the end of March, compared to EGP 710.03bn at the end of February, according to the Ministry of Finance.
The ministry indicated in a recent report that there are two types of bonds in Egyptian pounds, the first being coupon yield bonds, the balance of which recorded EGP 660.023bn, with an average return rate of 12.828%. These bonds were put forward from 12 February 2008 until 8 March 2016. The interest rate on these bonds ranges between 9.15% and 17%.
The second type of bond, the zero coupon bonds, recorded a balance of EGP 66.95bn, with an average interest rate of 12.108%. Zero coupon bonds were proposed between 28 January 2014 and 8 March 2016. The average interest rate on these bonds is between 11.319% and 13.538%.
The payment of balances for coupon yield bonds is scheduled between 7 May 2016 and 10 November 2025, while that of zero coupon bonds will be between 12 April 2016 and 5 September 2017.
The Ministry of Finance said the bonds worth $3bn will be repaid on 17 December 2016, with average interest rate of 3.5%. Other bonds issued in global financial markets, worth $4.5bn, are also set to be repaid in the period between 1 July 2016 and 29 April 2040, with average interest rate of 5.333%.
The largest investors of treasury bonds and bills are banks operating in the Egyptian market. The government puts forward the treasury bonds and bills on a regular basis to cover the state budget deficit, which is projected to be at 9.9% in the newly drafted budget for fiscal year 2016/2017.
Treasury bonds and bills are proposed through 15 banks, which are the primary dealers in the primary market. These banks resell a portion of these bills and bonds in the secondary market to retail investors, as well as local and foreign institutions.
The banks participating in the system include: the National Bank of Egypt, Banque Misr, Banque du Caire, Commercial International Bank (CIB), Citibank, HSBC Egypt, Misr Iran Development Bank, Qatar National Bank (QNB), Credit Agricole Egypt, Barclays Egypt, AlexBank Intesa Sanpaolo, Intesa Sanpaolo Group, Arab African International Bank, Export Development Bank of Egypt, Suez Canal Bank and Arab Bank.