$3 billion bonds issued to repay maturing debts. Oversubscribed six times

$3 billion bonds issued
to repay maturing debts
Oversubscribed six times
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The Ministry of Finance (MoF) issued U.S. dollar denominated bonds worth $3 billion to repay foreign currency debt maturing throughout the year. The original objective was to raise $1.5 billion.

The bonds were divided into three tranches with maturities set at ten, 15, and 20 years

The issue was managed by four banks: Barclays, Byblos Bank, Societe Generale de Banque au Liban (SGBL), and JPMorgan.

Subscription bids from local and foreign banks and financial institutions have generated a total order book of $17.8 billion, almost six times the value of the bond issue, according to Finance Minister Ali Hassan Khalil.

Foreign banks and financial institutions have subscribed to nearly $600 million or 20 percent of the issue.

“This reflects an unwavering confidence and interest in Lebanese bonds at a global level,” Khalil said.

The value of the bond issue is within the $3 billion ceiling granted by law.

He said: “The yields on the new bonds are good compared with those prevalent in secondary markets.”

The bonds have been issued in the following three tranches:
Value$1.25 billion$1 billion$750 million
MaturityMarch 2027March 2032March 2037
Yield6.85 percentSeven percent7.25 percent

The country’s widening public debt is currently around $75 billion or about 150 percent of GDP. It has been growing over the years to finance a chronic fiscal deficit which reached $4.94 billion in 2016.
Reported by Shikrallah Nakhoul
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Date Posted: Mar 22, 2017