On Debt-stricken Lebanon, Investors See Little Room for Optimism

Emerging market investors are no strangers to sovereign debt crises, but few have been as perilous as the one facing Lebanon given a toxic combination of financial and political weaknesses and no obvious economic platform on which to build a recovery, Reuters reported. Since defaulting for the first time on its foreign currency debt in March, Lebanon has formed a rescue plan and started negotiations with the International Monetary Fund on $10 billion of aid, both moves that would normally be read as positive for a country mired in debt. But the country’s $31 billion of sovereign dollar-bonds have generally rallied only a few cents in the last two months and are languishing at around 17 cents in the dollar. Read more