Lebanon’s defaulted sovereign dollar bonds climbed for a fifth day on investor optimism that a candidate will be picked after a two-year vacuum
The candidate backed by Hezbollah and Amal Movement withdrew from Lebanon’s presidential race late Wednesday and announced his support for the commander of the Lebanese Armed Forces.
Sleiman Frangieh, a politician from North Lebanon who had close ties to Syria’s now-deposed al-Assad regime, announced his eleventh-hour decision in a post on X. Frangieh failed to garner the necessary votes in previous electoral sessions.
“In light of the way things have turned out, I announce the withdrawal of my candidacy, which was never an obstacle to the election process,” he said.
Frangieh thanked those who backed him without directly mentioning Hezbollah or Amal and threw his support behind the Lebanese Armed Forces (LAF) commander, Gen. Joseph Aoun.
“In line with what I had previously announced, I will support Gen. Joseph Aoun, who possesses the qualifications [for the position of the president],” Frangieh said.
Al Arabiya English reported on Tuesday that Aoun and Jihad Azour, a current IMF official and former Lebanese minister, were frontrunners. Aoun is preferred in Washington and has the support of most of the international community, but a constitutional issue was an obstacle he needed to overcome in the 128-member Parliament. He needs 86 votes because of his position as a senior public servant instead of 65 for others. As of Wednesday night, Aoun’s path appeared clear, with more MPs publicly endorsing him.
Caretaker Prime Minister Najib Mikati said for the first time since the presidential vaccum, “I feel happy because, God willing, tomorrow we will have a new president of the Republic.”
The country has been without a president since October 2022. Since then, a devastating war between Iran and groups it backs and Israel has reshaped the region. This included the assassination of Hezbollah’s secretary-general, Hassan Nasrallah, who was seen as Iran’s point man for its so-called axis of resistance. Bashar al-Assad was also forced to flee Syria after opposition groups toppled his regime at the end of 2024, putting an end to the 61-year Baath Party rule in the country.
Lebanon’s defaulted sovereign dollar bonds climbed for a fifth day on Wednesday on investor optimism that a candidate will be picked this time. That extended their rally in the early days of 2025 to 15 percent, the most among emerging-market peers. The advances build on a 114 percent return to bondholders last year, also the biggest in the asset class.
“We are cautiously optimistic that tomorrow’s vote can lead to the emergence of a successful candidate and to the end of the presidential vacuum,” Goldman Sachs analyst Farouk Soussa said in a note.
