This four-year deal, handled entirely by Morgan Stanley, marks
Lebanon's latest effort to manage its worrisome public debt: it
also provoked a hissy fit among rival debt market investment
bankers.
It refinanced $650 million of local US dollar Contractor bonds and
raised an additional $100 million off the Republic's MTN programme.
Contractor bonds were launched by the government in the 1990s to
settle large arrears to construction companies incurred through the
country's heavy post-war reconstruction spending.
The issue pays a semi-annual coupon of 10.5% - a good price for
the sovereign, as some market participants had expected a level
between 13% and 14%. The deal went exclusively to Lebanese
accounts, mainly to banks, although there was some retail
participation.
Much to the annoyance of rival bankers, Morgan Stanley executed
the deal for no fee, citing relationship reasons. Rival bankers
speculate that the relationship reason might be a forthcoming
telecoms mandate. Morgan Stanley...
