The dollar-denominated bond, which is the first since the formation of Prime Minister Fouad Siniora’s cabinet in July, was several times oversubscribed, with local banks picking up 55 per cent of the issue. The remaining 45 per cent was taken by private Gulf investors and foreign hedge funds. The bond will be used to cover debt due to mature in April 2006, local bankers say.

In spite of political instability following the assassination of former prime minister Rafiq Hariri in February, analysts say that the withdrawal of Syrian forces in April was seen as a positive development and that there is still sustained appetite from local and foreign investors for Lebanon’s debt.

‘There is a lot of liquidity in the market at the moment,’ says Joe Sarrouh, adviser to the chairman of Fransabank. ‘I think the latest political events have raised Lebanon’s international profile creating a positive feeling for the future both inside and outside the country. The New York meeting [of international donors] was very successful, with the US, the UK, France, Egypt and Saudi Arabia all expected to attend the international donors’ conference in Beirut later in the year.’

Beirut’s net total public debt stood at $33,000 million in June, according to Banque du Liban (central bank).