Beirut finance house Capital Investment Services (CIS) said on 24 September that it had closed a $23 million issue of dollardenominated notes linked to Lebanese treasury bills. The issue is the seventh in a $100 million programme run jointly by CIS and Royal Bank of Canada (MEED 5:4:96).

The issue was in two parts: $16.6 million worth of senior notes, which pay 13.5 per cent a year interest compounded each year, and $6.6 million in junior notes, which carry no interest, but pay returns linked to the appreciation of the Lebanese pound against the dollar.

The pound has strengthened markedly against the dollar since the note programme began in May 1994, despite political uncertainty and periodic Israeli military assaults on the south.

Both kinds have maturities of two years.

Two-year Lebanese treasury bill yields have fallen in recent months and currently yield 21.66 per cent. Earlier issues by the CIS note programme were made against six-month and one-year treasury bills. CIS says the average yield of the first six note issues over two years, assuming a constant exchange rate, would be 38 per cent. Taking account of the pound's rise, the return is over 50 per cent.