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Lebanon plans to raise $1B through tap

Lebanese Central Bank. (The Daily Star)

LONDON: Lebanon, rated B1/B/B, is planning to raise $1 billion through an increase of its outstanding 2023 and 2027 Eurobonds, according to one of the lead managers.

The sovereign has released yield guidance of 6.1-6.2 percent for a $500 million tap of its 6 percent notes due Jan. 27, 2023, and of 6.6-6.75 percent for a $500 million increase of its 6.75 percent notes due Nov. 29, 2027.

The name of the lead manager was no disclosed.

The transaction would bring the total outstanding on each note to $1 billion.

Fransa Invest Bank, Natixis and Standard Chartered are joint bookrunners on the deal, which they are expected to price Thursday afternoon.

The caretaking Cabinet has the power to swap maturing Eurobonds and Treasury bills with new ones but is not authorized to borrow money above the official ceiling.

Central Bank Governor Riad Salameh recently said that Lebanon was capable of financing all its needs thanks to excessive cash of the Lebanese commercial banks.

The country will not have any problems financing the public debt until the end of 2013, according to experts.

However, many Lebanese bankers told The Daily Star that they were not prepared to lend the state more money in the future unless they saw concrete steps to implement reforms, cut waste in public departments, combat corruption and allow the private sector to take part in mega-infrastructure projects such as the construction of new electricity plans. – With IFR

 
A version of this article appeared in the print edition of The Daily Star on April 11, 2013, on page 5.

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