Byblos Bank raises capital

$300-million bond raises adequacy to 15 percent

Byblos Bank issued a new ten-year convertible subordinate bond with a total value of $300 million. The deal was closed on December 21. The bond has an annual coupon rate of 6.5 percent to be paid on a quarterly basis. The majority of subscribers were Lebanese.

Alain Wanna, Head of Financial Markets Division at Byblos Bank, said the new instrument aims to strengthen the Bank’s capital base and its liquidity. “This issuance has raised our capital adequacy ratio to 15.5 percent, from around 13 percent,” said Wanna. Byblos Bank’s Tier One and Tier Two capital is now $1.855 billion.

Subscribers to the new bond will have the right to convert their holdings into Byblos common shares or into GDRs (global depository receipts). Subscribers will also have the right to subscribe to any capital increase by Byblos Bank as well as to any new issue of convertible loans or convertible bonds. The bond will not be listed on any stock exchange.

Wanna foresees only a slight change in the performance of banks in 2012 from last year: “I expect the sector to have a similar growth rate as in 2011 plus or minus five percent.” However, he said, the sector’s profitability could decrease during 2013: “Internal pressure, regional aspects, and public finance issues, such as the salary scale, could weigh down profits.”