US cut down Libor rate to 3.5% and Lebanon is forced to pay a higher interest rate on its public debt

We are given to understand that the bills that fall due in March 2008 (around $2 billion) will be swapped for deferred bills at a higher interest rate because the local banks refuse to finance the government any more. This would mean that Lebanon will have to pay more than the average 8.5% that it is paying now, while the Libor rate in the US has come down to 3.5%.
IS THAT NORMAL?