Egypt raised 1 billion Egyptian pounds ($164.04 million) on Monday with its first sale of floating-rate notes, capitalising on a tumble in yields since June as hopes rise that more stable politics will help secure new aid for the struggling economy.

Investors bought the entire offering at an average yield of 15.388 per cent, the central bank said. The minimum yield accepted was 15.22 per cent and the maximum 15.45 per cent. The coupon on the notes was set at 15.454 per cent.

The two-year notes, which are bonds with variable coupons, will mature on September 16, 2014.

The notes will allow investors to minimise their interest rate risk and the government to diversify its debt instruments and its investor base, the Finance Ministry said in a presentation sent to banks last week.

The ministry was encouraging financial institutions and individuals to invest, "especially after recent events", an apparent reference to the economic turmoil in the year and a half since Hosni Mubarak was ousted in a popular uprising.

Treasury yields have fallen sharply from historic highs since June after a new elected president stamped his authority over the powerful army and named a largely technocratic government that is pushing hard to secure foreign help for the economy.

At an auction on Sunday, the average yield on 273-day treasury bills tumbled to 14.465 per cent, its lowest since November last year, from 15.794 per cent at an auction on Sept. 2, prompting the central bank to sell more than it had offered.

The coupons on the floating-rate notes, to be paid every six months, are equal to the weighted average yield of six-month treasury bills at the four most recent auctions plus a spread, the ministry said.

Six-month T-bills issued on Tuesday had an average yield of 15.096 per cent, compared to less than 10 per cent in the weeks before the uprising.-Reuters