Egypt’s new sovereign trades tighter; trader says buyside now holding the reins in EM

By Paul A. Harris

Portland, Ore., Feb. 14 – Late Tuesday Egypt priced $4 billion of sovereign notes (/B-/B) in three tranches.

The notes in all three tranches were 2 basis points tighter on Wednesday, heading into the London close, according to a trader based there.

It was not the best time to bring a deal, the trader said, reckoning that Egypt paid a concession of 25 bps to get it done.

The issuer and the dealers may be patting themselves on the back for getting it done, the trader said. But they were generous.

Some of that generosity was extracted during the execution, the trader recounted.

The $1.25 billion five-year paper, which came at Treasuries plus 303 bps, was initially talked at 315 bps, before official talk of 305 to 310 bps surfaced.

The $1.25 billion 10-year bonds, which came at 373 bps, were initially talked at 385 bps, then officially talked at 375 to 380 bps.

The long tranche, $1.5 billion of 30-year paper, came at 478 bps. The long bonds were initially talked at 490 bps, then officially at 480 to 485 bps.

Or you can elect not to pay up, as was the case with GTLK Europe Capital DAC which withdrew its benchmark offering of dollar-denominated seven-year Regulation S senior notes (Ba3//BB) after setting the price at 5½% on Tuesday, the trader said.

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