Lebanon’s BLOM Bond Index (BBI) added 2.28% over the week ending June 21st 2019 to settle at 89.45 points, thereby surpassing the JP Morgan Emerging Markets’ Bond Index (EMBI) which rose by 1.71% to reach 855.37 points.
In fact, the demand on the Lebanese 5 year (5Y) and 10Y Eurobonds heightened over the past week, as their respective yields fell from 12.02% and 11.31%, to 11.50% and 10.81%. Yet the yields on shorter-term Eurobonds continued to be higher than those on the longer-term maturities during this week. It is also worthy to mention that the Lebanon 5Y CDS reached highs of 910 on Monday mainly on the back of continued uncertainty regarding a finalized budget, but it dropped back to 886 basis point by June 20.
In the US, the FED met on Wednesday and signaled possible future cuts in interest rates, owing it to the possibility of slower economic growth and rising trade tensions. Hence, we witnessed a rush, by investors, to the safety of US treasuries during the week.
As a result, the yields on 5Y and 10Y US treasuries slipped from 1.84% and 2.10%, to 1.74% and 2.01%, respectively.
Due to the better performance of Lebanese Eurobonds, the 5Y and 10Y spread between the yield on the latter and their US comparables narrowed from 1018 and 921 basis points (bps) last week to 976 and 880 bps this week.
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 20/06/2019 | 13/06/2019 | Change | 20/06/2019 | 13/06/2019 | Change bps |
| 12/04/2021 | 8.25 | 94.25 | 93.89 | 0.38% | 11.85% | 12.05% | -20 |
| 04/10/2022 | 6.1 | 85.67 | 84.34 | 1.58% | 11.44% | 11.96% | -52 |
| 27/01/2023 | 6 | 83.96 | 82.60 | 1.64% | 11.57% | 12.06% | -50 |
| 22/04/2024 | 6.65 | 82.38 | 80.78 | 1.97% | 11.49% | 11.98% | -48 |
| 04/11/2024 | 6.25 | 80.25 | 78.82 | 1.81% | 11.24% | 11.65% | -40 |
| 03/12/2024 | 7.00 | 82.25 | 81.03 | 1.50% | 11.47% | 11.80% | -34 |
| 26/02/2025 | 6.20 | 79.75 | 78.17 | 2.02% | 11.09% | 11.52% | -43 |
| 12/06/2025 | 6.25 | 80.25 | 78.78 | 1.87% | 10.82% | 11.20% | -38 |
| 28/11/2026 | 6.60 | 78.83 | 77.05 | 2.31% | 10.81% | 11.22% | -41 |
| 23/03/2027 | 6.85 | 78.96 | 76.86 | 2.73% | 10.94% | 11.41% | -47 |
| 29/11/2027 | 6.75 | 77.83 | 75.58 | 2.99% | 10.82% | 11.31% | -49 |
| 03/11/2028 | 6.65 | 77.75 | 75.32 | 3.23% | 10.42% | 10.91% | -49 |
| 26/02/2030 | 6.65 | 76.67 | 73.33 | 4.55% | 10.30% | 10.94% | -64 |
| 22/04/2031 | 7.00 | 76.15 | 73.85 | 3.11% | 10.58% | 11.00% | -42 |
| 23/03/2032 | 7.00 | 78.33 | 75.97 | 3.11% | 10.05% | 10.45% | -40 |
| 02/11/2035 | 7.05 | 76.13 | 73.32 | 3.82% | 10.05% | 10.49% | -44 |
| 23/03/2037 | 7.25 | 76.79 | 73.91 | 3.90% | 10.08% | 10.52% | -44 |