Lebanese Eurobonds Register a 2-week Downturn

The BLOM Bond Index (BBI), registering a 0.43% drop from the 8^th of September to reach 102.68 points, lagged behind the JP Morgan Emerging Markets’ Bond Index which witnessed a 0.14% fall over the past 2 weeks to 773.44 points.

Demand for Eurobonds was down both in Lebanon and the United States. The Lebanese Eurobonds maturing in 5 and 10 years saw their yields increase from last week’s 6.25% and 6.83% two weeks earlier to 6.38% and 6.91% this week, respectively.

In the US, as traders and investors are expressing different views on the Fed raising interest rates, yields on the US treasuries maturing in 5 years fell from 1.19% to 1.18%, while yields maturing in 10 years increased from 1.61% to 1.63%, this week.

The spread between the yields on the 5 Year and 10 Year Lebanese Eurobonds and their US comparable widened over the past two weeks from 506 bps and 522bps to 520 bps and 528 bps, respectively.

5 Year Credit Default Swaps, Mid-Prices (in basis points)