Egypt Independent

Moody’s calls Egypt bonds ‘risky’

The international ratings agency Moody’s, in a report released Monday, said that recently issued Egyptian government bonds will carry huge financial risks.

Moody’s had described the Egyptian bonds as “junk bonds” on its ratings scale, which is the highest risk level that bonds can score in terms of debt settlement failure.

The agency, which many big investors resort to before making transactions, also said that Egypt suffers from numerous financial problems: a huge state budget deficit, a remarkable drop in per capita income, a continuous inflation rate, and an uncertainty as to who will succeed President Hosni Mubarak.

For its part, the Egyptian finance ministry said that continued subscriptions to Egyptian bonds by investors around the world reflect confidence in the Egyptian economy, adding that subscribers have been able to sell bonds for five percent profit.

Translated from the Arabic Edition.