Banque du Liban (BdL) announced that it sold to Lebanese banks $3bn in Lebanese Eurobonds from its portfolio, exceeding the $1bn that it intended to sell originally, due to high local demand. It indicated that it sold $1.2bn of a Eurobond that matures on March 20, 2028 and that carries a coupon rate of 7%, $1.05bn of a bond maturing on May 17, 2033 carrying a coupon rate of 8.2%, and $752.5m of a Eurobond that matures on May 17, 2034 and that carries a coupon rate of 8.25%. It pointed out that banks that held Certificates of Deposits issued by BdL discounted them at par value to cover the cost of the acquired Eurobonds. BdL said that the transaction reduced its liabilities by $3bn and increased its assets in US dollars by $2.5bn. It added that it still holds about $4.7bn in Lebanese Eurobonds in its portfolio, equivalent to about 8.2% of its total assets in US dollars, and that it does not intend to sell additional Eurobonds during the remainder of 2018. In addition, BdL noted that it will pay in cash all maturing Eurobonds and related debt servicing cost in 2018, upon instructions from the Ministry of Finance. BdL acquired the four Eurobonds through two separate swap operations with the Ministry of Finance. In November 2017, the Ministry of Finance issued $1.7bn in Eurobonds and exchanged them with Lebanese pound-denominated Treasury bills from BdL's portfolio. In May 2018, the ministry issued a $5.5bn four-tranche Lebanese Eurobonds and exchanged them with LBP8,250bn worth of Lebanese pound-denominated Treasury bills from BdL's portfolio.  

In parallel, global financial services firm Bank of America Merrill Lynch (BofAML) considered that the Eurobond sale eases near-term sovereign liquidity constraints, and does not erode the profitability of BdL and of local banks. It added that local banks acquired the Eurobonds from BdL at a yield that is one percentage point below market rates, which means that banks are unlikely to sell them to the market now and would hold them at amortized cost in their hold-to-maturity books. Also, it anticipated the Eurobonds' technicals to improve in the near term. However, it noted that the Eurobond sale did not attract foreign currency inflows, as local banks swapped their existing foreign currency-denominated assets for the Eurobonds without tapping their foreign currency liquidity abroad.

Further, BofAML estimated that local banks discounted with BdL at least $1.7bn worth of foreign-currency denominated Certificate of Deposits (CDs) that mature by 2021 from their portfolio in order to cover the cost of the Eurobond sale. As such, it said that, following the transaction with BdL, local banks would have extended the duration of their holdings and raised their yields by between 1% and 2%. Under the assumption that Lebanese banks discounted $1.7bn in foreign currency-denominated CDs with BdL, BofAML considered that local banks generated the remaining $1.3bn through discounting their holdings of the $700m Eurobond that matures in June 2018 and the $1bn Eurobond that matures in November 2018. As such, it said that local banks held about 75% of the $1.7bn U.S.-denominated Eurobonds maturing in 2018. 

In addition, BofAML estimated that BdL generated a modest profit of around $50m from the Eurobond sale, which constitutes between 15% to 25% of BdL's annual historical profits that range between $200m and $300m. It added that the sale decreases BdL's foreign currency-denominated liabilities by between $1.7bn and $3bn, as the discounted CDs would be withdrawn, which supports its net foreign currency reserves.