Lebanese capital markets review
Lebanon sold an extra $200 million of the 4-year Eurobond originally issued last December and that matures in 2004. The extra trance was increased to $200 million, up from the initially targeted $150 million due to demand. It carries a fixed rate of 9.5 percent, similar to the original issue. Local banks subscribed to 75 percent f the new issue. The trend in foreign currency borrowing reflects the restructuring of the public debt as the Lebanese government is gradually shifting towards foreign financing in order to borrow at lower cost and over a longer period of Time J.P. Morgan and CSFB jointly executed the bond’s issuance.
Lebanon is the largest issuer of Eurobonds in the Middle East and North Africa region, with
Lebanese banks holding the majority of the country’s $4.6 billion in Eurobonds and $18 billion in Lebanese pound treasury bills. Last October, the Central Bank allowed this exposure to rise by increasing from 70 percent to 75 percent the limit of foreign bank assets that could be invested in Eurobonds. International rating agencies Fitch IBCA and Standard & Poor’s recently downgraded Lebanon’s long-term currency ratings citing the country’s deteriorating public finances. — ( Lebanon Invest )
© 2001 Mena Report (www.menareport.com)