Banque du Liban HQ in Beirut. (Credit: PHB).
BEIRUT – Lebanese eurobond prices fell to their lowest level in two months, closing at 16 cents to the dollar on Friday – down from 16.95 the previous week – as geopolitical tensions escalated, according to Bank Audi’s weekly report. They posted a modest rebound on Monday, edging up to 16.25 cents.
The war between Iran and Israel which erupted on Friday, rattled both regional and international markets, plunging the Middle East into profound uncertainty and raising fears of a wider conflict across the region.
“Institutional investors have been offloading their bond holdings, while demand remained quasi-absent,” said chief economist and head of research at Bank Audi Marwan Barakat, causing the downward trend for Lebanon’s government debts.
Lebanon had defaulted in its sovereign debt in March 2020, a first in its history. It has since failed to engage in meaningful debt restructuring with its bondholders.
Lebanon’s battered Eurobonds had soared by 167 percent since September 2024 – when they were trading at just 6 cents on the dollar – as institutional investors wagered on Hezbollah’s weakening in the wake of its devastating war with Israel.