After 9 months of delay, Lebanon’s government formation has improved Lebanon’s Eurobonds’prices. .In fact, Lebanon’s BLOM Bond Index (BBI) increased this week by 4.89% to reach 92.60 points the highest since more than 5 months. As such, the yields on 5Y and 10Y Lebanese Eurobonds declined by 147 and 98 basis points (bps) each to reach 9.93% and 9.50%, respectively, this week.
As such, the BBI outperformed the JP Morgan Emerging Markets’ Bond Index (EMBI) this week, as the latter recorded a 0.66% weekly rise to stand at 804.75 points .
In the US, demand for 5 Year and 10 Year US treasuries rose as the Fed ‘s meeting on Wednesday helped the rally in both stocks and bonds. In fact, the US Federal Reserve has voted to leave interest rates on hold, at their current level of up to 2.5% and it will be ‘patient’ before raising interest rates again in 2019. Moreover, the equity market was boosted by strong earnings results from major companies such as Facebook and General Electric .
As a result, the 5Y and 10Y US treasuries’ yields declined from 2.55% and 2.72% last week to 2.43% and 2.63% this week, respectively. In its turn, the 5Y spread and 10Y spread between the yield on the Lebanese Eurobonds and their US couterparts narrowed weekly by 135 and 89 basis points (bps) to reach 750 and 687 bps respectively.
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 31/01/2019 | 17/01/2019 | Change | 31/01/2019 | 17/01/2019 | Change bps |
| 09/03/2020 | 6.375 | 95.833 | 94.5 | 1.41% | 10.45% | 11.72% | -127 |
| 14/04/2020 | 5.8 | 94.125 | 92.38 | 1.89% | 11.14% | 12.71% | -157 |
| 19/06/2020 | 6.15 | 93.989 | 92 | 2.16% | 10.94% | 12.53% | -160 |
| 12/04/2021 | 8.25 | 95.183 | 91.88 | 3.59% | 10.76% | 12.54% | -179 |
| 04/10/2022 | 6.1 | 87.84 | 84 | 4.57% | 10.14% | 11.53% | -139 |
| 27/01/2023 | 6 | 88.232 | 83.25 | 5.98% | 9.62% | 11.31% | -169 |
| 22/04/2024 | 6.65 | 87.833 | 81.88 | 7.27% | 9.67% | 11.32% | -165 |
| 04/11/2024 | 6.25 | 84.916 | 79.25 | 7.15% | 9.73% | 11.22% | -149 |
| 03/12/2024 | 7.00 | 84.577 | 81.5 | 3.78% | 10.61% | 11.41% | -81 |
| 26/02/2025 | 6.20 | 85.041 | 80 | 6.30% | 9.50% | 10.76% | -126 |
| 12/06/2025 | 6.25 | 84.584 | 79.88 | 5.89% | 9.53% | 10.67% | -114 |
| 28/11/2026 | 6.60 | 83.791 | 79.75 | 5.07% | 9.59% | 10.44% | -85 |
| 23/03/2027 | 6.85 | 84.667 | 79.88 | 5.99% | 9.60% | 10.59% | -98 |
| 29/11/2027 | 6.75 | 83.833 | 78.88 | 6.28% | 9.49% | 10.47% | -97 |
| 03/11/2028 | 6.65 | 83.083 | 78.13 | 6.34% | 9.33% | 10.24% | -91 |
| 26/02/2030 | 6.65 | 81.833 | 77.38 | 5.75% | 9.31% | 10.08% | -77 |
| 22/04/2031 | 7.00 | 81.833 | 77.25 | 5.93% | 9.55% | 10.31% | -76 |
| 23/03/2032 | 7.00 | 82 | 77.5 | 5.81% | 9.41% | 10.13% | -72 |
| 02/11/2035 | 7.05 | 81.5 | 77.25 | 5.50% | 9.24% | 9.85% | -61 |
| 23/03/2037 | 7.25 | 81.791 | 77.38 | 5.70% | 9.35% | 9.97% | -62 |