A $750 million
Eurobond swap

To cover maturing debt in 2016

The Ministry of Finance (MoF) has recently begun a swap operation of $750 million Eurobonds to mature on January 19, 2016. This measure is to cover a debt due for payment at the beginning of next year.

“The swap process is underway, but it’s too early to evaluate the appetite of investors,” said Wassim Mansouri, Advisor to the Minister of Finance. “Banks represent the bulk of these bond holders, while the rest are foreign investors. That’s why the MoF is optimistic about the success of this swap,” he said.

The original Eurobonds will be replaced by long term ones maturing in 2024 and 2028, respectively.

In parallel, the MoF is expected to announce soon the results of a $1.3 billion Eurobonds issue to cover the full country’s debt duties for 2015. Four banks have been appointed to promote subscriptions to this new issue of Eurobonds, including Fransabank, Société Générale de Banque au Liban (SGBL), Standard Chartered and Citi.

Mansour confirmed that the review of the country’s recent sovereign outlook by some credit rating agencies won’t affect the remaining Eurobonds issue negatively. “We expect the appetite of subscribers to be high, as usual,” he said. “If Parliament convenes and approves fixed laws and projects, the country will regain the confidence of investors,” he said.

Standard and Poor’s revised Lebanon’s sovereign risk outlook from stable to negative last September.