Lebanese demand for TBs on the rise

Published December 10th, 2000 - 02:00 GMT

Purchase TB subscriptions resumed their increase as they gained 30.3 percent at the November 30 auction, to LP661.16 billion ($438.58 million), while maturing bills rose 16.5 percent to LP436.27 billion ($289.40 million), thus resulting in an LP150 billion ($99.5 million) surplus.  

 

Investor confidence has gradually risen over the past month as the new government has started to introduce “business friendly” measures. Reshuffling of portfolios continued this week as investors turned their attention from short and long-term TBs in order to purchase medium term 12-M TBs. The shares of the 3-M and 6-M TBs out of total purchase subscriptions were down 13.9 percent and 6.8 percent respectively to a combined 22.2 percent weighting. 

 

A switch in fortunes between the 24-M and 12-M TBs saw the share of the former step back by 12.2 percent, while that of the latter increased by 33 percentage points to 51.9 percent of total subscriptions.  

 

The Central bank sold LP9 billion ($5.97 million) worth of 45-day certificates of deposit dated December 8 at an unchanged interest rate.  

 

Attention in the Eurobond market was more focused on the new sovereign issue of $400m maturing December 14,2001 and carrying a coupon of 9.5 percent. The bond was priced at a spread of 410 b.p. over the US Treasury curve.  

 

The bond’s pricing came in below the yields of most outstanding traded Lebanese sovereigns on a mid-yield basis.  

 

JP Morgan and Credit Suisse First Boston acted as lead-managers of the Eurobond, which will be listed on the Luxembourg Bourse. The bond was mainly placed within Lebanon (65 percent), mostly picked-up by local banks, with the remainder of the issue divided between the Middle East (25 percent) and Europe (10 percent). ¯ ( Banque du Liban et d'Outre-Mer Sal )  

© 2000 Mena Report (www.menareport.com)

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