Lebanon’s Ministry of Finance completes debt exchange with Central Bank

Lebanon’s Ministry of Finance (MoF) released on Friday that a debt exchange was completed with the Central Bank of Lebanon (BDL) whereby Treasury Bills (TBs) held by the latter will be exchanged for $5.5B worth of Eurobonds. The operation entails also the subscription of BDL for the equivalent of LBP8,250B of TBs for maturities between 3 and 10 years with a coupon rate of 1%, which will reduce the debt service by $1.4B over the life of the bills.

The new Eurobonds are issued in four tranches; two of them held by BDL following October 2017’s issuance (2028 and 2031) and the other two are new ones maturing in 2033 and 2034. In details, the four tranches will be distributed as follows:

  1. An additional $1B on March 2028 maturity with a coupon rate of 8%
  2. An additional $1.5B on November 2031 maturity with a coupon rate of 8.1%
  3. $1.5B maturing in May 2033 with a coupon rate of 8.2%
  4. $1.5B maturing in May 2034 with a coupon rate of 8.25%

As a result, the MoF will be able to refinance its maturing foreign currency debt and interest payments for 2018, which hover around $4.5B and BDL will strengthen its foreign assets.


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