Bankers working on the deal say trading has remained thin since the launch, partly due to the war jitters that have affected the Cairo & Alexandria Stock Exchange, which was buoyed briefly by the Egyptian pound's flotation in late January.

'The launch itself went like clockwork, and a significant chunk was picked up by the banks,' says Salman Butt, head of investment banking for Citibank Egypt, which arranged and underwrote the issue with Commercial International Bank (Egypt)and Banque Misr. 'There hasn't been much trading since, partly because inter-bank prices have gone down, but also because it is a much-cherished asset and everyone is holding onto it. At the moment there are buyers and no sellers, but this is a general feature of the stock market in the run-up to war.'

Marketed as one package, the bond is split into fixed and floating-rate tranches, each with a maturity of six and a half years. The first is worth £E 600 million ($111 million) and pays a fixed coupon of 13 per cent. The second tranche, worth £E 400 million ($74 million), pays a floating coupon of the Central Bank of Egypt rate plus 2 per cent. Local bankers say the combination was particularly attractive for investors as it gives a certain amount of flexibility when trading.

The local Orascom Construction Industries (OCI) and Switzerland's Holcim are the principal shareholders in ECC, which produces 7 million tonnes a year (t/y) of cement from its Suez complex. The company recorded revenues of $99 million in the first half of 2002, with a net profit margin of more than 25 per cent.