2024-02-29 12:19:00
After the announcement of the Ras El Hekma deal
Published on: February 29, 2024: 04:19 PM GST Last updated: February 29, 2024: 05:15 PM GST
Data from Standard & Poor’s Global Market Intelligence showed on Thursday that the cost of insuring Egyptian debt in hard currency fell to its lowest levels since April 2022.
The heavily indebted state’s bonds also rose after the government announced Ras Al-Hekma’s major multi-billion-dollar investment deal with the UAE on Friday.
During Thursday’s trading, the initial cost of Egypt’s five-year credit risk swap contracts fell to 18 basis points, from 29 basis points a week ago.
Traditional contracts used to insure debt against the risk of default recorded 586.54, which is also the lowest level since April 2022.
Over the past two days, the prices of Egyptian assets listed externally have exploded, with the announcement of the Ras El Hekma deal, especially with the huge amount of liquidity that will be pumped over a very short period of time, reversing the wheel of the debt and liquidity equation, and relieving Egypt from a disaster-like scenario.
The deal, which was praised by many Egyptian and Arab businessmen, and was the most widely discussed in search engines and on social media platforms, reduces a large portion of Egyptian debt by up to 7%, while converting the UAE deposit of $11 billion into investment, thus reducing Egyptian debt amounting to 164.7%. One billion dollars until June 2023.
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