Free Republic

President Barack Obama's guarantee on $1 billion of Egyptian Eurobonds is poised to reduce the country's borrowing costs, helping the transition to democracy after six decades of autocratic rule. The support that Obama pledged last month may cut yields on the five-year debt by 200 basis points, or the equivalent of $100 million, according to the median estimate of five fund managers surveyed by Bloomberg. Yields on Egypt's one-year bills jumped to the highest level since November 2008 following the uprising that ousted President Hosni Mubarak in February. The country last sold international debt in April 2010. "The American backing...

Just because the US is having so much success convincing the world its debt is...good,...the good old US of A has now decided to backstop the debt of...Egypt. Bloomberg reports: "Egypt plans to raise $1 billion by selling Eurobonds this year to diversify borrowing and finance a widening budget deficit after its economy was rocked by the worst political crisis in 30 years. The five-year bonds will be backed by a U.S. “sovereign guarantee,” Finance Minister Samir Radwan said by telephone from Cairo today...President Barack Obama promised last week $2 billion in loan guarantees and debt forgiveness." And when it...