Moody's upgrades Egypt's credit rating to B3

International credit ratings agency Moody's upgraded on Tuesday Egypt's credit rating to B3 from Caa1 with a stable outlook, a move that could pave the way for better rates in the anticipated government offering for Eurobonds.

The decision was based on improved macroeconomic performance with the expectation that growth will reach 4.5 percent for the current fiscal year and rise to 5-6 percent in the coming four years, the agency said. The credit agency also cited ongoing fiscal and economic reforms as well as continuing support from Gulf countries as being behind the upgrade.

“The rating is still speculative. It is good there has been an increase. It is a reflection of a much better economic policy but it would help Egypt to have an even better rating,” Angus Blair, chairman of business and economic forecasting think-tank Signet, told Ahram Online.

The decision is good news for Egypt's planned dollar-dominated Eurobond issue, the first since the 2011 revolution.

Finance Minister Hany Qadry said the anticipated launch of up to $2 billion in dollar-dominated Eurobonds will take place before the end of June in different maturities, with possible combinations of 3, 5 and 7 years, but would expect them to be less than 10 years, Reuters reported in February.