Egyptian General Petroleum Corp. has short-listed a group of banks for a potential structured transaction, according to a source familiar with the process. Citigroup Global Markets, Merrill Lynch and Morgan Stanley are among the shops expected to make proposals as early as this week. While the deal could end up in the ballpark of $200 million, the source said that volume is difficult to predict at this point, since the company apparently did not release flow data along with the RFPs.

Prospective arrangers have been reportedly approaching monoline insurers about the transaction. The issuer did not limit the proposals to a securitization, but arrangers are likely to pitch a future-flows structure, the source said. "A future flow would make the most sense in the current environment," said another well-placed source, referring to the instability of oil prices and the headline risk associated with Middle Eastern producers.

Egyptian General Petroleum is apparently unrated, but as a state-owned entity its credit quality might be strongly associated with the sovereign. Fitch Ratings, Moody's Investors Service and Standard & Poor's have given Egypt foreign currency ratings of BB+', Ba1', and BB+', respectively.

Elsewhere in the country, Morgan Stanley and Merrill already have a mandate from National Bank of Egypt for a transaction backed by diversified payment rights. Tax issues are reportedly stalling that deal.

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