High demand raises Lebanon bond issue to $1 billion

Published April 9th, 2001 - 02:00 GMT

Lebanon has raised a five-year bond issue from $600 million to one billion dollars due to high demand, a finance ministry statement said Friday, April 6. 


"Due to high demand for Lebanese bonds in foreign currencies, the $600-million bond issue has been raised to a one-billion-dollar five-year issue with an interest of 9.875 percent," the statement said. 


Finance Minister Fuad Siniora had announced last Friday the launch of a $600-million bond issue to be co-managed by Paribas, ABN-Amro and Citicorp. 


The finance ministry statement said the funds would be used to cover $500 million in obligations that mature at the end of April, with the remaining $500 million "to replace internal debt with foreign debt which is less costly." 


"This new issue is not considered an additional debt since it is a replacement of internal and foreign debt that has matured, with a foreign debt maturing in five years," it said. 


The statement said between 15 percent and 20 percent of the investors in the new issue "were of complete foreign sources." 


"The great success of this bond issue reflects the confidence enjoyed by Lebanon locally and internationally and asserts that Lebanon has a good investor reputation," it said. 


It also asserts "the confidence of local, Arab and international financial institutions for the measures adopted by the government toward reactivating the economic wheel and achieving growth," it added. 


On Tuesday, Siniora had announced that Lebanon will soon issue treasury bonds worth $300 million over 15 years, in the country's first such long-term issue. 


The 15-year bond issue, to be managed by Credit Suisse First Boston (CSFB), will be offered to non-Lebanese investors abroad and will also cover replacing debt in Lebanese pounds with debt in foreign currencies. 


Lebanese banks carry 80 percent of the public debt, which is valued at $25 billion or 147 percent of the country's gross domestic product (GDP). — (AFP, Beirut) 


© Agence France Presse 2001

© 2001 Mena Report (www.menareport.com)

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