Lack of Legal Clause Leaves Crisis-hit Lebanon Bonds Prone to Litigation

As Lebanon’s crisis-hit bonds flash warnings of a sovereign debt distress ahead, any potential restructuring is likely complicated by the absence of widely-used legal clauses barring bondholders from holding up the negotiations in the courts, Reuters reported. Lebanon is one of the few countries - alongside the Bahamas, Azerbaijan, Macedonia and Poland - to not include so-called enhanced collective action clauses, or CACs, in the legal framework governing its recent bond sales. The crisis-hit Mediterranean state has issued around $15 billion of international bonds since October 2014 without those clauses - more than any other country, according to an International Monetary Fund report from March. Read more

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