Subscription was due to close on 27 August to $2,200 million-worth of dollar-denominated sovereign eurobonds, arranged by Citigroupand Morgan Stanley. The paper is being issued in exchange for existing eurobonds, held mainly by local banks, coming due in 2005.Investors could opt for five-and-a-half-year paper paying 7.125 per cent or eight-year paper paying 7.75 per cent. Both instruments, which have been assigned a B- rating by Standard & Poor’s (S&P), are due to be issued on 7 September and will replace three maturing eurobonds worth $1,000 million, $850 million and $450 million. The debt swap is the biggest eurobond transaction so far in the country and it is designed to reduce debt-servicing costs. According to S&P, the issue could reduce Beirut’s gross financing requirement by as much as 2.5 per cent of gross domestic product (GDP). In May, the government issued two eurobonds, arranged by BNP Paribasand Credit Suisse First Boston, worth a total of $1,270 million to replace debt coming due in 2004 (MEED 21:5:04).