Lebanon’s BLOM Bond Index (BBI) compiled by BLOMInvest Bank recorded a weekly downtick of 3.03% in the week ending September 27, 2019, to settle at 74.36 points. Meanwhile, JP Morgan Emerging Markets’ Bond Index (EMBI) retreated by 0.22% to close the week at 863.25 points.
According to BLOMInvest Bank, the demand on the 5 year (5Y) and 10Y Lebanese Eurobonds dropped over the past week, as their respective yields rose from 17.95% and 13.60%, to 19% and 14.30%, respectively. As for the 5Y CDS, it recorded a drop from 1,320 basis point by September 19, 2019 to 1,238 basis point by September 27, 2019.
In the US, Treasury yields dropped by the end of the week and global bond markets rallied as geopolitical jitters from Washington boosted demand for haven assets. In fact, U.S. House Democrats endorsed an impeachment inquiry into President Donald Trump. The announcement came amid reports that Trump may have used his presidential powers and asked for help from a foreign government to undermine former Vice President Joe Biden, the current Democratic frontrunner, and help his own re-election. Moreover, U.S.-Iran tensions and the possibility of a no-deal Brexit have also kept investors cautious. As a result, the yields on 5Y and 10Y US treasuries dropped from 1.66% and 1.79% to 1.59% and 1.70%, respectively
As such, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparables widen from last week’s 1629 and 1181bps, to 1741 and 1260 bps this week.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 26/09/2019 | 19/09/2019 | |
| Lebanon | 1,238 | 1,320 |
| KSA | 77 | 72 |
| Dubai | 133 | 123 |
| Brazil | 137 | 128 |
| Turkey | 369 | 382 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 26/09/2019 | 19/09/2019 | Change | 26/09/2019 | 19/09/2019 | Change bps |
| 12/04/2021 | 8.25 | 84.55 | 93.25 | -9.33% | 20.40% | 11.59% | 880 |
| 04/10/2022 | 6.1 | 70.54 | 84.88 | -16.89% | 19.44% | 11.04% | 840 |
| 27/01/2023 | 6 | 69.33 | 83.00 | -16.47% | 18.77% | 11.23% | 753 |
| 22/04/2024 | 6.65 | 67.25 | 81.38 | -17.36% | 17.30% | 11.36% | 594 |
| 04/11/2024 | 6.25 | 66.96 | 78.75 | -14.97% | 15.95% | 11.26% | 468 |
| 03/12/2024 | 7.00 | 67.03 | 81.75 | -18.00% | 16.75% | 11.27% | 548 |
| 26/02/2025 | 6.20 | 66.46 | 77.63 | -14.39% | 15.59% | 11.29% | 430 |
| 12/06/2025 | 6.25 | 66.67 | 77.50 | -13.98% | 15.17% | 11.20% | 397 |
| 28/11/2026 | 6.60 | 64.42 | 76.25 | -15.52% | 14.82% | 11.17% | 364 |
| 23/03/2027 | 6.85 | 64.42 | 77.00 | -16.34% | 14.89% | 11.17% | 372 |
| 29/11/2027 | 6.75 | 64.33 | 75.75 | -15.07% | 14.28% | 11.08% | 320 |
| 03/11/2028 | 6.65 | 64.46 | 74.25 | -13.18% | 13.56% | 10.97% | 259 |
| 26/02/2030 | 6.65 | 64.54 | 72.75 | -11.28% | 12.94% | 10.92% | 202 |
| 22/04/2031 | 7.00 | 64.32 | 73.38 | -12.35% | 13.06% | 10.98% | 208 |
| 23/03/2032 | 7.00 | 64.67 | 73.13 | -11.57% | 12.72% | 10.86% | 186 |
| 02/11/2035 | 7.05 | 64.70 | 72.38 | -10.61% | 12.07% | 10.59% | 148 |
| 23/03/2037 | 7.25 | 64.67 | 72.63 | -10.96% | 12.17% | 10.68% | 149 |