Lebanese Eurobonds Market Experienced Declining Demand over the Week

Demand for Lebanese Eurobonds decreased over the past week pushing the BLOM Bond Index (BBI) down by 0.16% to 103.75 points. In contrast, the JP Morgan Emerging Markets’ Bond Index increased by 0.66% over the week to reach 682.40 points.

The yields on the 5Y and 10Y Lebanese notes increased from 6.15% and 6.69% to 6.48% and 6.87%, respectively.

Demand for safe haven US treasuries increased over the week, after Federal Reserve Officials signalled that they will proceed cautiously with raising interest rates. Accordingly, the yield on 5Y and 10Y US treasuries dropped from last week’s 1.73% and 2.32% to 1.68% and 2.24%, respectively.

Consequently, the spread between the yields on the 5Y Lebanese Eurobonds and their US comparable rose from 442 basis points (bps) to 480 bps while the 10Y spread widened from 437 bps to 463 bps.

 Lebanon’s 5Y Credit Default Swaps (CDS) broadened from 392-417 bps to 411-433 bps. Saudi Arabia’s 5Y CDS narrowed to 146-156 bps from last week’s 153-162 bps while Dubai’s quotes widened from 190-198 bps to 200-213 bps. Brazil’s and Turkey’s 5Y CDS quotes tightened from 421-429 bps to 394-398 bps and from 249-253 bps to 239-246 bps, respectively.  

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