BEIRUT- Lebanon is in no rush to close a deal to issue $2.5 billion to $3 billion in Eurobonds by May 20 and can wait until emerging markets have more appetite and the government has approved its budget, a source familiar with the matter said on Wednesday.

The finance minister said last month the government was preparing to issue the Eurobonds on May 20. The bonds will pay off all Lebanon's maturing foreign-currency debt for 2019, including a May 20 maturity of $650 million, the source said.

"There’s no rush to close the deal on the same date as the maturity of the $650 million, May 20 bond," the source said.

"The Ministry of Finance can do a forex transaction (with the central bank) to pay back investors who hold this tranche and can close the deal later when the emerging markets have more appetite and the local yields have improved on the back of good news on the budget," the source said.

The Lebanese government is discussing a draft state budget for 2019 that aims to lower the deficit to below 9% of GDP from 11.2% in 2018.

In line with the norm, the government expects 80% of the new Eurobond issue to go to local investors and 20% to go to international investors, the source said.

(Reporting By Angus McDowall; Editing by Catherine Evans) ((angus.mcdowall@thomsonreuters.com; Reuters Messaging: angus.mcdowall.thomsonreuters.com@reuters.net))