Record Egypt-tied note issuance highlights IMF loan cheer

Investors are rushing back to structured notes tied to Egypt following a currency float and an International Monetary Fund loan last quarter, six years after a revolution that had scared them off. Citigroup Inc. issued all four of the recorded credit-linked notes this month raising a total of 2.3 billion Egyptian pounds ($121 million), the most for a single month on record, according to data compiled by Bloomberg. The biggest was a one-year zero coupon security sold at about 84 percent of face value.

The deals come just as Egypt’s government raised $4 billion in international debt markets Tuesday, its first such issuance since it floated its currency in November. The offering was oversubscribed, Finance Minister Amr al-Garhy said on Bloomberg TV, as fund managers competed to invest in Africa’s third-largest economy amid growing confidence spurred by the $12 billion IMF loan. The fund released details of the conditions on that lending last week in a report.

“The staff report from the IMF suggests things are heading in the right direction for Egypt,” said Bilal Khan, senior economist for Middle East, North Africa and Pakistan at Standard Chartered PLC in Karachi.