Lebanon’s latest $2bn Eurobond issue launched in mid-November was not met with the usual enthusiasm in the market. Lebanese Minister of Finance Muhammad Safadi announced last week that banks only subscribed to a total of $1.55bn and that the government had hoped to raise more cash from the transaction. He explained that Lebanese banks, which mainly acquired the bonds, were not eager to subscribe to the full amount because of the long maturity and relatively low yield of the issue. Also he said that the political climate in the region had affected market response
Byblos Bank, BLOM Bank and Credit Suisse were the lead managers of the long-dated issue, which is intended to be a debt exchange offer for Eurobonds maturing in 2013. Byblos Bank Chairman Francois Basil agreed that Lebanese banks had shied away from the issue because of the long maturity and low return. He called on the government to stop tapping the market and instead focus on financial reforms. Lebanese commercial banks are awash with liquidity, which together with the central bank foreign currency reserves are sufficient to keep rolling over maturing bonds for many years, many Lebanese economists argue. (CONTINUED - 610 WORDS)
