The Lebanese economy continues to suffer while policymakers are failing to form a new government to apply the necessary reforms in order to unlock the international financial support.
The BLOM Bond Index (BBI) which is BLOMInvest Bank’s market value-weighted index tracking the performance of the Lebanese government Eurobonds’ market (excluding coupon payments), decreased by 3.93% from the week ending January 7th to stand at 14.17 points in the week ending January 28, 2021. Meanwhile, the JP Morgan EMBI rose from 924.37 in week of January 7th to 984.08 points this week.
As such, the yields of the 5 year (5Y) and 10 year (10Y) Lebanese Eurobonds rose during this period from 70.50% and 53.65% to 73.40% and 56.60%, respectively.
In the US, the yields on 5 year (5Y) and 10 year (10Y) US treasuries, recorded a decrease from 0.46% and 1.08%, to 0.42% and 1.07%, respectively.
Amidst President Joe Bidens segnioring and first week into his presidency, the US observed a reverse of some of the most controversial policies of the past four years. However, on a separate note, the US health sector witnessed deficiency in the Covid vaccine rollout. Many health clinics were suffering from delayed doses and last-minute allocations which adds to their tough situation. Hence, the demand on US treasury bonds observed an upsurge.
As such, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparables widened from 7,004 bps and 5,257 bps to 7,298 bps and 5,553 respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
28/01/2021 | 07/01/2021 | |
Lebanon | N/A | N/A |
KSA | 69 | 66 |
Dubai | 112 | 110 |
Brazil | 172 | 143 |
Turkey | 315 | 312 |
Source: Bloomberg |
Weekly Change of Lebanese Eurobonds Prices
Prices | Weekly | Yields | Weekly | ||||
Maturity | Coupon in % | 28/01/2021 | 07/01/2021 | Change | 28/01/2021 | 07/01/2021 | Change bps |
04/10/2022 | 6.10 | 13.23 | 13.50 | -1.98% | 189.56% | 179.77% | 979 |
27/01/2023 | 6.00 | 12.96 | 13.50 | -3.98% | 159.85% | 150.22% | 963 |
22/04/2024 | 6.65 | 13.08 | 13.63 | -4.02% | 100.89% | 96.84% | 404 |
04/11/2024 | 6.25 | 12.97 | 13.56 | -4.32% | 87.78% | 84.37% | 341 |
03/12/2024 | 7.00 | 12.82 | 13.57 | -5.51% | 90.51% | 86.42% | 409 |
26/02/2025 | 6.20 | 13.00 | 13.55 | -4.04% | 82.39% | 79.24% | 315 |
12/06/2025 | 6.25 | 13.19 | 13.99 | -5.75% | 77.60% | 74.08% | 352 |
28/11/2026 | 6.60 | 12.95 | 13.55 | -4.41% | 66.63% | 64.31% | 232 |
23/03/2027 | 6.85 | 12.96 | 13.26 | -2.23% | 65.98% | 64.57% | 141 |
29/11/2027 | 6.75 | 12.80 | 13.57 | -5.65% | 62.73% | 59.97% | 275 |
03/11/2028 | 6.65 | 12.97 | 13.56 | -4.36% | 58.30% | 56.23% | 207 |
26/02/2030 | 6.65 | 12.95 | 13.18 | -1.81% | 55.54% | 54.54% | 101 |
22/04/2031 | 7.00 | 12.63 | 13.60 | -7.08% | 57.22% | 53.66% | 355 |
23/03/2032 | 7.00 | 12.86 | 13.59 | -5.40% | 55.62% | 52.86% | 276 |
02/11/2035 | 7.05 | 13.01 | 13.56 | -4.09% | 54.08% | 51.99% | 210 |
23/03/2037 | 7.25 | 12.91 | 13.46 | -4.08% | 55.87% | 53.60% | 227 |
Source: BLOMInvest Bank