Political talks concerning ceasing the presidential vacuum pushed the demand for Lebanese Eurobonds higher. Hence, the BLOM Bond Index (BBI) went up by 0.39% to 103.07 points, outperforming the JP Morgan Emerging Markets’ Bond Index that lost 1.05% to 676.29 points.
Yields on the 5Y and 10Y Lebanese Eurobonds dropped 4 basis points (bps) and 2 bps to 6.46% and 6.85%, respectively.
Demand for safe haven US treasuries declined over the week on increased expectations for interest rate hikes. Thus, the yields on the 5Y and 10Y US treasuries inched up from 1.66% and 2.23% to 1.74% and 2.33%, respectively.
Consequently, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable tightened from last week’s 484 bps and 464 bps to 472 bps and 452 bps, respectively.
Lebanon’s 5Y Credit Default Swaps (CDS) narrowed slightly to 406-426 bps, from last week’s 408-428 bps, as did the CDS of Saudi Arabia going from 151-158 bps to 135-145 bps.
In contrast, Dubai’s CDS quotes widened from 194-202 bps to 217-227 bps. Similarly, the CDS quotes of Brazil and of Turkey broadened from 419-426 bps and 252-256 bps to 448-454 bps and 264-268 bps, respectively.