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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 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.Rated "Caa1" by Moody's, well below investment grade, the Egyptian bond trades inside Pakistan's 2019 dollar bond, which carries the same rating, by a whopping 235 basis points.Egypt is outperforming even more highly rated bonds. Last June, the Egyptian paper was trading 44 basis points inside Lebanon's March 2020 Eurobond, which is rated two notches higher; now it is trading 113 basis points inside.Gross domestic product is expected to grow 4 percent in the current fiscal year to end-June, Prime Minister Ibrahim Medlib said last week; that would be up from 2.2 percent last year, but still below levels which many economists think necessary to make a big dent in Egypt's youth unemployment.At the end of 2010, foreigners held more than 22 percent of Egyptian Treasury bills; last October, they held just 0.13 percent of the $63 billion market, latest data shows.
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