Global Arab Network | Moody's rates Egypt sovereign US.5 billion bonds Ba1

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Moody's rates Egypt sovereign US$1.5 billion bonds Ba1

Global Arab Network - - Mohammed Almasri

Monday, 26 April 2010 14:16

Moody's Investors Service has assigned ratings of Ba1 to the dollar-denominated senior unsecured bonds recently issued by the government of Egypt. These ratings are in line with the government of Egypt's existing issuer ratings , which are also Ba1 with a stable outlook.

The total size of the bond issuance was US$1.5 billion, split into two tranches: a US$1 billion tranche maturing in 2020 and a US$500 million tranche maturing in 2040. The government has stated that the proceeds from the bonds will be used for general funding purposes.

Moody's says that the government of Egypt's Ba1 issuer ratings are supported by the country's robust external position, relatively well diversified economy, favourable public debt structure, and the current government's track record of economic reform.

Credit concerns for Egypt include a wide fiscal deficit and substantial public debt, low income per capita and poor social indicators, lingering inflationary pressures, and political uncertainty over the succession.

Moody's last rating action on Egypt was taken on 19th August 2009, when the rating agency changed the outlook on the government's Ba1 issuer ratings to stable from negative.

The principal methodology used in rating the government of Egypt is Moody's Sovereign Bond Methodology, published in September 2008. Other methodologies and factors that may have been considered in the process of rating this issuer can be found in the Rating Methodologies sub-directory on Moody's web site.

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