Lebanon’s Finance Minster, Fuad Saniora, offered on Tuesday, July 24, $400 million eurobonds with seven years to maturity, reported AFP news agency. Demand surged and within the first two hours of the offer subscriptions reached $600 million, of which $130 million was from foreign investors.
The new issue is meant to replace debt denominated in Lebanese currency with debt in foreign currencies, since the latter has longer maturity periods and carries better interest rates than Lebanese treasury bonds.
Saniora told a press conference that the total amount to be issued would only be known after financial markets closed in New York.
The eurobond will offer a 10.125 percent interest rate, a yield significantly higher than that offered by emerging markets which range between 2.5 and 3.5 percent. Merrill Lynch and Solomon Smith Barney are to co-manage the bond issue.
Last month, the Lebanese parliament approved the 2001 state budget, in which the government is allowed to issue up to $2 billion worth of bonds for the purpose of debt restructuring and foreign loans repayments.
Lebanon currently has $6.2 billion worth of eurobonds in international markets, 77 percent of which is subscribed by Lebanese banks. —(MENA Report)
© 2001 Mena Report (www.menareport.com)
