Lebanon, rated B1/B/B, successfully closed its $1.1bn Eurobond on 11 April. The oversubscribed sovereign bond, which was originally set at $1bn, was issued in two tranches – $600mn due 27 January 2023 at a reoffer price of 98.892 to yield 6.15% and $500mn due 29 November 2027 at a reoffer price of 100.451 to yield 6.7%, a lead banker has said. The latest issue will thus raise the outstanding amount of the 2023 existing bond issue to $1.1bn and the 2027 issue to $1bn. The joint book-runners on the deal were Fransa Invest Bank, Natixis and Standard Chartered. The latest issue is seen in banking circles as a positive development given the political and security situation in the region and the financial crisis in Europe. Central Bank of Lebanon (CBL) Governor Riad Salamah has recently said that his country was capable of financing all its needs thanks to the excessive cash in Lebanese commercial banks. But Lebanese bankers have often warned that they would not be prepared to continue lending to the state in the future unless they saw concrete steps to implement reforms, eliminate waste in public departments, combat corruption and allow the private sector to participate in mega infrastructure projects.
On 10 April Standard & Poor’s affirmed Lebanon’s long - and short-term - foreign and local currency sovereign credit ratings at B/B, but with the outlook remaining negative. S&P said “risks to domestic political stability remain, and there appears little potential for economic, fiscal, and external improvements while the Syrian conflict continues.” Howevver, rapidly naming a new prime minister after Najib Mikati resigned in March will help defuse domestic political tension in the near term, noted the ratings agency. (CONTINUED - 273 WORDS)
