Positive Week for Lebanese Eurobonds Following the $3B New Issue

Another weekly progress was depicted on the Lebanese Eurobonds market this week as reflected by the BLOM Bond Index (BBI) that increased by a weekly 0.54% to 105.47 points; nonetheless, it lagged behind the JP Morgan Emerging Markets’ Bond Index which registered a weekly rise of 0.76% to 767.02 points.

Demand for Lebanese Eurobonds maturing in 5 and 10 years escalated this week, which is mainly due to the $3B new Eurobonds issue that took place this week. In fact, foreign participation stood behind the rising demand for the new issue as it was one the highest recorded in recent years. As such, the 5Y yields dropped from 5.51% to 5.43% and the 10Y yields fell from 6.86% to 6.73%.

In the U.S., even though Treasuries weakened on Thursday ahead of the vote on the healthcare law, demand for safe assets remained strong as investors remained cautious over the week regarding initial jobless claims and the scheduled speech of the Federal Reserve Chair, Janet Yellen on March 23. As a result, yields on the 5 years and 10 years maturities went down from 2.05% and 2.53% to 1.95% and 2.41%, respectively.

The 5 year spread between the Lebanese Eurobonds’ yields and the US treasuries shrank by 20 basis points (bps) to stand at 348 bps, while that of the 10 year treasuries slipped by 1 bp to 432 bps. Worth noting that there is a noticeable divergence between the 5Y CDS and the 5Y spread, which could be linked to the reigning uncertainty amongst investors regarding the upcoming parliamentary elections.

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

24/03/2017 16/03/2017
Lebanon 434 408
KSA 101 91
Dubai 124 110
Brazil 241 217
Turkey 237 226

Lebanese Eurobonds: Weekly Update

Prices Weekly Yields Weekly
Maturity Coupon in % 23/03/2017 16/03/2017 Change 23/03/2017 16/03/2017 Change bps
12/06/2018 5.15 101.13 101.25 -0.12% 4.19% 4.11% 8
12/11/2018 5.15 101.25 101.25 0.00% 4.35% 4.36% -1
23/04/2019 5.5 101.5 101.38 0.12% 4.74% 4.81% -7
20/05/2019 6 102.5 102.38 0.12% 4.77% 4.84% -7
28/11/2019 5.45 101.25 101.38 -0.13% 4.95% 4.90% 5
09/03/2020 6.375 103.63 103.75 -0.12% 5.04% 5.01% 3
14/04/2020 5.8 101.75 101.75 0.00% 5.18% 5.18% 0
19/06/2020 6.15 102.63 102.5 0.13% 5.26% 5.31% -5
12/04/2021 8.25 110.5 109.75 0.68% 5.34% 5.54% -21
04/10/2022 6.1 101.75 100.75 0.99% 5.73% 5.94% -21
27/01/2023 6 100.88 100 0.88% 5.82% 6.00% -18
22/04/2024 6.65 101.88 101.25 0.62% 6.32% 6.44% -11
04/11/2024 6.25 99.38 98.75 0.64% 6.37% 6.47% -11
03/12/2024 7.00 103.5 103 0.49% 6.44% 6.52% -8
26/02/2025 6.20 98.25 97.5 0.77% 6.49% 6.62% -12
12/06/2025 6.25 98.13 97.63 0.51% 6.55% 6.63% -8
28/11/2026 6.60 99.25 98.25 1.02% 6.71% 6.85% -14
29/11/2027 6.75 99.5 98.63 0.88% 6.82% 6.94% -12
03/11/2028 6.65 98.38 97.5 0.90% 6.87% 6.98% -11
26/02/2030 6.65 98.25 97.13 1.15% 6.86% 6.99% -13
22/04/2031 7.00 99.88 98.75 1.14% 7.04% 7.16% -13
02/11/2035 7.05 99.25 98.38 0.88% 7.13% 7.22% -9

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