Fitch rates Egypt bonds BB+

Fitch Ratings said it assigned BB+ long-term foreign-currency ratings to the Arab Republic of Egypt's $1 billion of 5¾% 10-year notes and $500 million of 6 7/8% 30-year notes. The ratings are in line with Egypt's BB+ long-term foreign-currency issuer default rating, which has a stable outlook.

The agency said Egypt's economy has proved resilient to the global crisis and is now well into recovery mode. According to Fitch, the republic's relatively robust performance owes much to the reforms introduced since 2004 and the investment and diversification they have encouraged.

On the downside, fiscal consolidation has come to a halt as the authorities have adopted a more growth-supportive fiscal policy, the agency said. In Fitch's view, a temporary halt to fiscal consolidation is acceptable, but it said Egypt's fiscal room for maneuver remains limited with gross general government debt above 70% of GDP and net debt of nearly 60%.

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