The BLOM Bond Index (BBI) continued falling to an extensive decline of 13.29 points over this week, noting that latest disruptions in Lebanon fueled worries among the Lebanese. Moreover, investors’ concerns regrew mainly as Lebanon seems to be paralyzed by multiple regional and domestic developments and is far away from any reform plan or discussions with creditors over their Eurobonds.
In more details, 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), slumped further by 5.21% to stand at 13.29 points by the week ending November 11, 2021 compared to the week of November 04, 2021. Meanwhile, the JP Morgan EMBI slightly increased from 921.40 to 925.69 during the period.
In addition, the yield on the 5 years (5Y) and 10 years (10Y) Lebanese Eurobonds jumped by 218 and 341 basis points (bps), respectively, to end the week of November 11 at 73.60% and 57.21%.
In the US, the yields on 5 year treasuries and 10 year US treasuries recorded a uptick from the week ending November 04, 2021 from 1.10% to 1.23% and 1.53% to 1.56% by the week ending November 11, respectively.
This week in the U.S. market, October figures showed that inflation trends further accelerated to reach an all-time mostly backed by the sharp jump in energy prices which alone have recorded a huge uptick of 4.8%. Moreover, the U.S Bureau of Labor Statistics reported that over the last 12 months, all CPI components added 6.2% before seasonal adjustment. Concerning this matter, Treasury Secretary declared that the jump in U.S. inflation probably will not persist beyond next year as the Fed will surely act if it is necessary to prevent any rerun of 1970’s price hikes.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable recorded a jump from 7,032 bps and 5,227 bps to 7,237 bps and 5,565 respectively.
| 5Y Credit Default Swaps (CDS) | ||
| 11/11/2021 | 11/04/2021 | |
| Lebanon | . | . |
| KSA | 48 | 48 |
| Dubai | 89 | 92 |
| Brazil | 238 | 241 |
| Turkey | 412 | 410 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 11/11/2021 | 04/11/2021 | Change | 11/11/2021 | 04/11/2021 | Change bps |
| 22/04/2024 | 6.65 | 12.83 | 14.04 | -8.61% | 132.54% | 124.22% | 832 |
| 04/11/2024 | 6.25 | 12.77 | 13.81 | -7.52% | 108.93% | 103.12% | 580 |
| 03/12/2024 | 7.00 | 12.76 | 13.81 | -7.60% | 109.54% | 103.44% | 610 |
| 26/02/2025 | 6.20 | 12.81 | 13.58 | -5.73% | 98.75% | 94.69% | 406 |
| 12/06/2025 | 6.25 | 13.12 | 13.85 | -5.27% | 90.93% | 87.40% | 353 |
| 28/11/2026 | 6.60 | 12.89 | 13.35 | -3.50% | 73.16% | 71.20% | 196 |
| 23/03/2027 | 6.85 | 12.78 | 13.29 | -3.78% | 71.87% | 69.90% | 197 |
| 29/11/2027 | 6.75 | 12.79 | 13.66 | -6.36% | 66.87% | 63.69% | 318 |
| 03/11/2028 | 6.65 | 12.79 | 13.36 | -4.20% | 61.91% | 59.96% | 195 |
| 26/02/2030 | 6.65 | 13.00 | 13.30 | -2.23% | 56.82% | 55.80% | 102 |
| 22/04/2031 | 7.00 | 12.75 | 13.65 | -6.60% | 57.98% | 54.76% | 322 |
| 23/03/2032 | 7.00 | 12.79 | 13.39 | -4.48% | 56.56% | 54.37% | 220 |
| 02/11/2035 | 7.05 | 12.75 | 13.19 | -3.33% | 55.61% | 53.88% | 173 |
| 23/03/2037 | 7.25 | 12.77 | 14.20 | -10.02% | 56.56% | 51.09% | 546 |
Source: BLOMInvest Bank