Lebanon would sell $600 million of five-year eurobonds next month to be its second foreign-currency debt issue this year, The Daily Star reported Saturday.
The upcoming deal will refinance the three-year, $500 million issue that matures in April and will also make a net addition to Lebanon’s outstanding eurobond stock.
Finance Minister Fouad Siniora was quoted by the Lebanese paper as saying that “Lebanese and foreign investors are showing keen interest in the new issue,” noting that the size of the issue may be increased depending on demand.
The issue will be managed by French investment bank BNP-Paribas, with Citigroup and ABN Amro as co-managers.
The new bond will yield about 9.75 percent and will be sold mainly to Lebanese banks and some Arab Gulf investors.
According to the daily, officials at local banks said the government would have little difficulty placing the $600 million issue but said that the interest on the bonds was lower than they had hoped.
“We were hoping the yield would be a bit more attractive, something around 10 percent,” said Samer Khalaf, head of capital markets at Banque Libanaise pour le Commerce.
The 9.75 percent yield on the new paper, which will mature in April 2006, is not much higher than yields on dollar-denominated Lebanese sovereign eurobonds that mature before then.
The issue maturing in September 2003 was yielding about 9.125 percent on the secondary market on Friday, the December 2004 paper was yielding about 9.5 percent, and the two issues maturing in 2005 were yielding between 9.6 and 9.7 percent – Albawaba.com
