Jobs
Properties
Automarket
Databank
EasyBanking
Search
Categories
Companies
People
Sectors
Topics
Business
Events
Conferences
Local trade exhibitions
International trade exhibitions
Professional
Training
Executive training
Trade
Missions
Incoming
Outgoing
Weekly
Newsletter
View latest issue
Subscribe
Update my subscription
Unsubscribe
SUBMIT INFO
News
Conferences
Exhibitions
Tenders
Training
Missions
Search
Categories
Financial
Markets
Business
Events
Trade
Missions
Business
Research
Calculation
Tools
Weekly
Newsletter
SUBMIT INFO
CHAMPION OF THE DAY
LEADERS NEWS
$14 billion raised
by the Central Bank
Nets around $5 billion from abroad
The Central Bank ended last month the closing of around $14 billion, or more, in a series of swaps, issuance of certificate of deposits (CDs), and other financial instruments, in what Lebanon Opportunities called in its December issue “The deal of the century”.
Lebanon Opportunities said: “This series of parallel transactions is shrouded in mystery. It was de rigueur for the Ministry of Finance and banks to produce fanfares and self-congratulatory statements at every successful – often routine – Eurobond issue. Most of these previous issues ranged from $400 million to $2 billion.” But not this time.
The swap program started after an alarm was sounded by the International Monetary Fund (IMF) regarding a growing deficit in net foreign exchange reserves that reached a historical record of $4.7 billion, and the balance of payments for 2016 was forecasted to exceed the $3.3 billion realized in 2015.
The Central Bank issued last month a brief statement explaining the circumstances that led to the operation on the backdrop of global, regional, and local security and financial events.
The banks brought dollars from abroad and exchanged them with lira and bought treasure bills (TBs). BDL redeemed the TBs prematurely (immediately) and paid upfront half the interest that was to be earned by the TBs. As a result, banks became short on dollars as they have exchanged a good portion of their holdings into the local currency, therefore becoming flush with lira. Banks let their big clients in on the deal, first retailing the deal to customers with a minimum entry ticket of $20 million. Once the operation became extended beyond the initial $2 billion mark, some banks lowered the entry threshold to as low as $5 million.
With more than half, Bank Audi had the lion’s share of the operation. Some estimates put their share at $8-$9 billion, generating fees and commissions exceeding $1.2 billion, extinguishing its mounting losses in foreign markets. SGBL, IBL, and Bankmed were also among the top players.
To lure funds from their high net worth depositors, banks offered their clients hard to resist terms. For example, Bank Audi offered an upfront payment of 20 percent (lowered subsequently to ten percent) and five percent payable in one year. Bankmed started with 30 percent and lowered it to 20 percent, and then to 15 percent. Other banks followed similar models.
Full report and details in the December issue of Lebanon Opportunities.
Your browser does not support iframes.
Date Posted:
Dec 08, 2016
Your browser does not support inline frames
ABOUT
ADVERTISE
SUBMIT INFO
RSS
CONTACT US
©
2021 by InfoPro sal. All Rights Reserved