Lebanese Eurobonds Trade at Their Highest Level Since Default After IMF Visit; US Bonds Rise to Multidecade Highs

The BLOM Bond Index rose this week by 0.48% to 29.8 points and prices are trading around 28–30¢ on the dollar. The move followed the IMF staff mission to Beirut. While the mission acknowledged several improvements, the most relevant issue for Eurobonds is the need to amend the Financial Stabilization and Deposits Recovery Law (known as the financial gap law) to ensure depositor protection, respect the hierarchy of claims, and make sure that a viable banking sector comes out of this process. In contrast, US Treasury yields surged to multidecade highs on strong economic data, rising energy prices, and mounting expectations of further Fed tightening.

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