Lack of 2019 Budget Casts Long Cloud Over Lebanon Bond Sale

Lebanon is eyeing the debt markets nervously. The country, which is lining up a $2.5bn bond sale partly to pay off $650m coming due on Monday, was hoping to capitalise on improved investor sentiment after it finally formed a government in February. But the timing is unfortunate — that new cabinet still has not come up with a budget for 2019. Emerging market investors are in a generally forgiving mood. The benchmark dollar bond index run by JPMorgan is up about 10 per cent from late-November lows and recent bond sales from some marginal issuers, such as Benin and Ghana, have flown off the shelves. But Lebanon, the small Mediterranean country squashed between Syria and Israel, harbours a cocktail of risks, from a frequently gridlocked political system to over-reliance on its outsized banking sector. Read more