The BLOM Bond Index (BBI), which tracks the performance of the Lebanese Eurobonds, lost a slight 0.02%, over the week, to 105.69 points. The BBI lagged behind the JP Morgan Emerging Markets’ Bond Index that gained a weekly 0.65% to 674.03 points.
The yield on the Lebanese Eurobonds maturing in 5Y lost 3 basis points (bps) to 5.84%, while the 10Y yield rose from 6.31% to 6.35%.
In the US, treasuries rallied, after the Federal Reserves decided to keep interest rates low for a longer period. Hence, the 5Y and 10Y yields dropped 5 bps and 2 bps to 1.50% and 2.21%, respectively.
Consequently, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 432 bps to 434 bps and from 408 bps to 414 bps, respectively.
Lebanon’s 5Y Credit Default Swaps (CDS) narrowed to 379-406 bps from last week’s 386-411 bps. The 5Y CDS quotes of Saudi Arabia and of Dubai widened from 45-55 bps and 175-185 bps to 81-90 bps and 180-194 bps, respectively. As for Turkey and Brazil, their 5Y CDS quotes narrowed from 290-292 bps and 388-393 bps to 264-267 bps and 376-381 bps, respectively.