Lebanon Default “Probable", Deposit Grab “Possible"

Lebanon’s precarious finances mean the crisis-hit country looks likely to default on its debt in some way and could even launch a Cyprus-style grab for savers’ bank accounts, Fitch’s top sovereign analyst said, Reuters reported. Lebanon’s debt problems have jumped back into focus this week after reports emerged of a bid by authorities there to try and delay some of this year’s bond repayments. A Lebanese source told Reuters that ratings agencies had told the authorities that the plan would constitute a “selective” or “restricted” default, ending its so-far unblemished rating record and potentially triggering further problems. Fitch’s head sovereign analyst James McCormack told Reuters a distressed debt event (DDE) is defined as when there is a material reduction in terms. That includes a maturity (payment deadline) extension to avoid a default. Read more