The Blom Bond Index (BBI) rose by a marginal 0.18% over the week to stand at 100.39 points by Dec.14, 2017. In its turn, the JP Morgan Emerging Markets’ Bond Index (EMBI) also rose by a weekly 0.18%, ending the week at 806.1 points.
Against this backdrop, the yields on the 5Y Eurobonds slipped from 7.2% last week to 7.1%, while the yields on the 10Y bonds remained unchanged at 7.50% this week. As such, the 5Y spread between the Lebanese Eurobonds and their US comparables declined from last week’s 506 basis points (bps) to 496 bps, while the 10Y spread grew from 513 bps to 515 bps.
Foreign investors’ perception of risk in Lebanon continued to improve this week as Lebanon’s 5Y credit default swaps slipped from last week’s 539 bps to 532bps on Dec.15, 2017. This may be partly attributed to the positive outlook spurred, with Cabinet approving the license for oil and gas excavation this past Thursday.
In the US, yields on treasuries maturing in 5 years remained unchanged at 2.14%, while yields on 10Y treasuries slipped from 2.37% to 2.35% by Dec.14th . The FED met this week, raising interest by a quarter percentage points (p.p.) for a third time in 2017; however, concerns on inflation persisted as the US core inflation rate released this week revealed November’s CPI (consumer price index) is below forecast, reducing expectations about a broad pickup in domestic inflation.
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 14/12/2017 | 07/12/2017 | Change | 14/12/2017 | 07/12/2017 | Change bps |
| 23/04/2019 | 5.5 | 99.13 | 98.88 | 0.25% | 6.17% | 6.36% | -18 |
| 20/05/2019 | 6 | 99.75 | 99.38 | 0.37% | 6.18% | 6.45% | -27 |
| 28/11/2019 | 5.45 | 98.5 | 98.13 | 0.38% | 6.28% | 6.47% | -20 |
| 09/03/2020 | 6.375 | 99.25 | 99 | 0.25% | 6.74% | 6.85% | -12 |
| 14/04/2020 | 5.8 | 98 | 97.75 | 0.26% | 6.74% | 6.85% | -11 |
| 19/06/2020 | 6.15 | 98.63 | 98.25 | 0.39% | 6.75% | 6.91% | -16 |
| 12/04/2021 | 8.25 | 103.75 | 103.5 | 0.24% | 6.96% | 7.05% | -9 |
| 04/10/2022 | 6.1 | 96.5 | 96 | 0.52% | 6.97% | 7.09% | -12 |
| 27/01/2023 | 6 | 95.5 | 94.88 | 0.65% | 7.06% | 7.21% | -15 |
| 22/04/2024 | 6.65 | 96.75 | 96.75 | 0.00% | 7.30% | 7.29% | 0 |
| 04/11/2024 | 6.25 | 94.38 | 94.13 | 0.27% | 7.30% | 7.35% | -5 |
| 03/12/2024 | 7.00 | 98.38 | 98 | 0.39% | 7.30% | 7.37% | -7 |
| 26/02/2025 | 6.20 | 93.88 | 93.38 | 0.54% | 7.31% | 7.40% | -9 |
| 12/06/2025 | 6.25 | 93.75 | 93.25 | 0.54% | 7.35% | 7.44% | -9 |
| 28/11/2026 | 6.60 | 94.75 | 94.5 | 0.26% | 7.41% | 7.45% | -4 |
| 23/03/2027 | 6.85 | 95.88 | 95.88 | 0.00% | 7.47% | 7.47% | 0 |
| 29/11/2027 | 6.75 | 94.88 | 94.75 | 0.14% | 7.49% | 7.51% | -2 |
| 03/11/2028 | 6.65 | 93.5 | 93.25 | 0.27% | 7.53% | 7.57% | -3 |
| 26/02/2030 | 6.65 | 92.25 | 92.25 | 0.00% | 7.64% | 7.63% | 0 |
| 22/04/2031 | 7.00 | 94.25 | 94.38 | -0.14% | 7.69% | 7.68% | 2 |
| 23/03/2032 | 7.00 | 93.5 | 93.63 | -0.14% | 7.76% | 7.74% | 2 |
| 02/11/2035 | 7.05 | 92.25 | 93 | -0.81% | 7.86% | 7.78% | 8 |
| 23/03/2037 | 7.25 | 91.75 | 93.25 | -1.61% | 8.10% | 7.94% | 16 |