UPDATE 1-Lebanon dual-tranche bond oversubscribed

BEIRUT, Nov 12 (Reuters) - Lebanon's dual-tranche Eurobond, placed earlier this week, was significantly oversubscribed with the $225 million tranche receiving bids four times the size of the issue, a banking source told Reuters on Friday. The bigger $500 million bond, maturing November 2018, was twice subscribed, the source said. The $225 million tranche matures in October 2022. "The demand came from international fund managers, international banks and local banks. There is good appetite in the international market for the country's sovereign issues," the source said. He also said the international market was more interested in the 2018 issue, adding foreign buyers had accounted for thirty percent of the demand for this tranche. Finance Minister Raya al-Hassan said in a statement that the issue was oversubscribed and that it showed the international market's confidence in Lebanon. "Definitely the result of the issue ... is a very significant indication and a clear positive message," she said. The yield on the 2018 Eurobond was 5.15 percent, while the 2022 deal was placed to yield 6.10 percent. Bank of Beirut and Credit Suisse arranged the issue, the proceeds of which were earmarked for refinancing maturing debt. Hassan said that the transaction resulted in the lowest market yields ever achieved by Lebanon on a fixed rate bond. She was hoping to roll over some debt maturing next year to benefit from low interest rates but such a decision requires ratification of the 2010 budget which has been stuck in parliament since June due to political wrangling. One of the world's most indebted countries relative to the size of its economy, Lebanon sold a $1.2 billion Eurobond in March, which attracted bids about three times the size of the issue. Its sovereign debt is rated B by both Standard & Poor's and Fitch. (Reporting by Mariam Karouny, editing by Sujata Rao/Ruth Pitchford) Keywords: LEBANON EUROBOND/DEMAND (mariam.karouny@thomsonreuters.com; Beirut newsroom :+961 1 983 885; Reuters Messaging: mariam.karouny.reuters.net@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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