Higher Demand on Lebanese Eurobonds this week

Lebanon’s BLOM Bond Index (BBI) continued the recovery this week, rising by 2.43% to reach 93.47 points. It is worthy to note that the BLOM Bond Index rose by 7.54% since its last dip recorded on July 2nd 2018 when it reached a low of 86.91 points. The BBI surpassed this week’s JP Morgan Emerging Markets’ Bond Index (EMBI) which recorded a 0.79% weekly uptick to stand at 777.6 points.

As such, the yields on the 5 year (5Y) and 10Y Lebanese Eurobonds declined from last week’s 9.3% and 9.8% to end the week at 8.85% and 9.2%, respectively.

In the US, the yields on the 5Y and 10Y treasury bills remained almost unchanged, adding only 1 basis point to 2.75% and 2.85%, respectively, by the week ending July 6th. In fact, demand on treasuries was mixed. Investors opted for safe haven investments as Trump announced a potential 10% tariff on $200B worth of Chinese goods effective around September 2018. Nevertheless, the demand on treasuries toned down as US data released this week revealed a 0.1% increase in June’s Consumer prices index. Moreover, data on job openings in May totalled 6.6M, also indicating a robust labour market.

Accordingly, the 5Y and 10Y spreads between the yield on the Lebanese Eurobonds and their US comparable narrowed from last week’s 656 basis points (bps) and 696 bps to 610 bps and 635 bps, respectively.

Weekly Change of Lebanese Eurobonds Prices

  Prices Weekly Yields Weekly
Maturity Coupon in % 12/07/2018 05/07/2018 Change 12/07/2018 05/07/2018 Change bps
28/11/2019 5.45 98.13 97.13 1.03% 6.89% 7.65% -76
09/03/2020 6.375 98.13 97.13 1.03% 7.59% 8.23% -64
14/04/2020 5.8 97 96 1.04% 7.65% 8.26% -61
19/06/2020 6.15 97.13 96.13 1.04% 7.77% 8.33% -56
12/04/2021 8.25 99.25 98.25 1.02% 8.55% 8.97% -42
04/10/2022 6.1 90.25 88.75 1.69% 8.91% 9.37% -45
27/01/2023 6 89 87.38 1.85% 9.00% 9.47% -47
22/04/2024 6.65 89 87 2.30% 9.14% 9.62% -49
04/11/2024 6.25 86.25 84.13 2.52% 9.16% 9.66% -49
03/12/2024 7.00 89.63 87.5 2.43% 9.18% 9.66% -48
26/02/2025 6.20 85.38 83.25 2.56% 9.19% 9.67% -48
12/06/2025 6.25 85.13 82.88 2.71% 9.20% 9.70% -49
28/11/2026 6.60 85.13 82.5 3.19% 9.18% 9.69% -51
23/03/2027 6.85 86.13 83.5 3.15% 9.20% 9.69% -50
29/11/2027 6.75 84.88 82.13 3.35% 9.19% 9.69% -50
03/11/2028 6.65 83.25 80.38 3.57% 9.20% 9.70% -50
26/02/2030 6.65 82 78.88 3.96% 9.20% 9.72% -51
22/04/2031 7.00 83.13 79.63 4.40% 9.28% 9.83% -55
23/03/2032 7.00 82.5 78.88 4.59% 9.28% 9.83% -55
02/11/2035 7.05 82 78.25 4.79% 9.14% 9.66% -52
23/03/2037 7.25 83.25 79 5.38% 9.13% 9.70% -57

 

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