Triumphant Egypt return to bond market risks ultra-tight pricing

Egypt's return to the international debt market after a five-year gap is set to attract heavy demand - so heavy that the new bonds risk pricing at precariously high levels.

The government plans to issue a $1.5 billion Eurobond in April and to return regularly to international capital markets in coming years, Hanan Salem, first deputy minister at the Ministry of Finance, told Reuters last month.

Trade in Egypt's outstanding U.S. dollar bond maturing in 2020 shows how dramatic the return of confidence in Egypt has been since President Abdel Fattah al-Sisi took office last year, oversaw the installation of a technocratic cabinet that is starting to reform the economy, and forged an alliance with rich Gulf states to obtain aid and investment.

The yield on the bond is at 4.47 percent, near a life low of 3.98 percent hit in December and down from a peak of 11.09 percent in June 2013, when the country was frozen out of the global debt market by political and economic turmoil.