Long Term Treasury Yields Rise due to the new Tax Reform Proposal
Over the past week, the BLOM Bond Index (BBI) dropped by 0.96%, to end the week at 103.43 points. It lagged behind the JP Morgan Emerging Markets’ Bond Index (EMBI) which slid by 0.17% to 801.69 points.
The yields on the Lebanese Eurobonds maturing in 5 years and 10 years broadened from 6.10% and 6.79% to 6.20% and 7.02% this week.
In the US, investors’ demand for long term treasury bills decreased on the back of Trump’s tax plan proposal that raised concerns about growth in the federal deficit and borrowing. As such, yields on the 10 year T-bills rose from 2.28% to 2.31% this week, while yields on the 5Y T-bills steadied at 1.89%.
The 5Y and 10Y spreads between the Lebanese Eurobonds and their US comparable escalated from 421 bps and 451 bps to 431 bps and 471 bps, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
| 28/09/2017 | 20/09/2017 | |
| Lebanon | 450 | 445 |
| KSA | 86 | 90 |
| Dubai | 148 | 149 |
| Brazil | 200 | 204 |
| Turkey | 188 | 186 |
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 28/09/2017 | 20/09/2017 | Change | 28/09/2017 | 20/09/2017 | Change bps |
| 12/11/2018 | 5.15 | 100.25 | 100.38 | -0.13% | 4.91% | 4.80% | 11 |
| 23/04/2019 | 5.5 | 100.38 | 100.88 | -0.50% | 5.24% | 4.92% | 33 |
| 20/05/2019 | 6 | 101.25 | 101.63 | -0.37% | 5.19% | 4.96% | 23 |
| 28/11/2019 | 5.45 | 100 | 100.75 | -0.74% | 5.45% | 5.08% | 37 |
| 09/03/2020 | 6.375 | 101.63 | 102.25 | -0.61% | 5.65% | 5.39% | 26 |
| 14/04/2020 | 5.8 | 100 | 100.6 | -0.60% | 5.80% | 5.54% | 25 |
| 19/06/2020 | 6.15 | 100.75 | 101.25 | -0.49% | 5.84% | 5.65% | 20 |
| 12/04/2021 | 8.25 | 107.38 | 107.88 | -0.46% | 5.91% | 5.77% | 14 |
| 04/10/2022 | 6.1 | 99.5 | 99.88 | -0.38% | 6.22% | 6.13% | 9 |
| 27/01/2023 | 6 | 98.13 | 98.75 | -0.63% | 6.42% | 6.28% | 14 |
| 22/04/2024 | 6.65 | 99.63 | 101 | -1.36% | 6.72% | 6.46% | 26 |
| 04/11/2024 | 6.25 | 97.38 | 98.63 | -1.27% | 6.72% | 6.49% | 23 |
| 03/12/2024 | 7.00 | 101.5 | 102.75 | -1.22% | 6.73% | 6.51% | 22 |
| 26/02/2025 | 6.20 | 96.88 | 97.88 | -1.02% | 6.74% | 6.56% | 18 |
| 12/06/2025 | 6.25 | 96.88 | 97.88 | -1.02% | 6.77% | 6.60% | 17 |
| 28/11/2026 | 6.60 | 97.88 | 99.25 | -1.38% | 6.91% | 6.71% | 21 |
| 23/03/2027 | 6.85 | 99 | 100.5 | -1.49% | 7.00% | 6.78% | 22 |
| 29/11/2027 | 6.75 | 98 | 99.63 | -1.64% | 7.03% | 6.80% | 23 |
| 03/11/2028 | 6.65 | 96.63 | 98 | -1.40% | 7.09% | 6.91% | 18 |
| 26/02/2030 | 6.65 | 96.38 | 97.38 | -1.03% | 7.09% | 6.97% | 12 |
| 22/04/2031 | 7.00 | 98.25 | 99.25 | -1.01% | 7.20% | 7.09% | 12 |
| 23/03/2032 | 7.00 | 97.5 | 99 | -1.52% | 7.28% | 7.11% | 17 |
| 02/11/2035 | 7.05 | 96.75 | 98.38 | -1.66% | 7.38% | 7.21% | 17 |
| 23/03/2037 | 7.25 | 96.25 | 98.75 | -2.53% | 7.62% | 7.37% | 25 |
