Bond issues lined up

24 April 2006
The government has appointed four local banks as co-lead arrangers on two new eurobonds to be issued by the end of April. The dollar and euro-denominated notes were originally planned to be new cash issues on top of a debt exchange involving a three-part eurobond transaction earlier this month.

Bank Audi, Byblos Bank, Bank Med and Fransabank will co-arrange the two bonds, which will involve a $590 million-650 million dollar portion and a Eur 150 million ($184 million) euro portion. The dollar-denominated paper will carry a coupon of 8.25 per cent and will mature in 2021. The euro-denominated bond, maturing in 2012, will carry a coupon of 5.875 per cent.

'The issue is expected by 26 April but we are still talking to the Finance Ministry,' says a banker involved in the transaction. 'We are still doing the book building so the final size is not clear. But there is good appetite.'

The government had originally planned to issue three bonds worth $2,550 million on 12 April in exchange for three maturing eurobonds but had to cancel the additional cash issues worth about $840 million due to a US court order on behalf of former mobile operator Libancell to freeze government assets abroad.

Libancell claims the Lebanese government owes it almost $270 million for cancelling prematurely its 10-year build-operate-transfer (BOT) contract, which was originally due to run until 2004, covering one of two domestic cellular networks. The other GSM operator at the time, Cellis, a subsidiary of France Telecom, has reached a settlement with the government worth $297 million to be paid between 2006 and 2008.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications