BEIRUT - Lebanon on Wednesday successfully exchanged $882 million of Eurobonds with a six year maturity and a nine percent yield, the Finance Ministry said in a statement.

"The exchange offer and issuance of additional notes have resulted in a combined new issuance of $881,612,000. The purpose of the exchange offer was to proactively conduct liability management operations, increase the Republic's financial flexibility and extend its debt maturity profile," it said.

The ministry explained that $732 million Eurobonds were actually exchanged in addition to the issuance of a new $150 million bond.

Finance Minister Jihad Azour said this transaction represents nearly 80 percent of Lebanon's outstanding debts in foreign currencies. "This transaction is another indication that that the financial situation is still stable despite the difficult circumstances."

The statement said that the exchange offer was made upon the terms and subject to the conditions set forth in an Exchange Offer Memorandum dated April 17, 2008.

Bank Audi and Credit Suisse are acting as dealer managers for the exchange offer. The Bank of New York is acting as exchange agent.

Azour said the transaction is part of pre-emptive measures which aims at tackling the outstanding payments in 2008.

Lebanese banks are usually the main buyers of the government's bonds.

The government regularly taps the local and international markets to meet the financial needs of the state.

The government has pledged to reduce the size of the public debt, which now stands at more than $41 billion, during Paris III donor conference in January 2007. - The Daily Star