Lebanon Needs More Than Mere Talk of Saudi Aid to Exit Debt Trap

A rally in Lebanon’s Eurobonds will prove short-lived if the country’s government can’t get serious about reforms that are needed to claim Saudi Arabian aid, Bloomberg News reported. The highly-indebted nation’s dollar yields sunk 104 basis points on Wednesday, the most since 2002, after Saudi Arabia said it was mulling financial support for its Middle Eastern neighbor. Investors also took heart from Prime Minister Saad Hariri traveling to Paris to meet French President Emmanuel Macron in a bid to unlock $11 billion of aid promised by international donors last year. Without outside assistance, Lebanon, which has a debt-GDP ratio of more than 150%, may struggle to avoid a default. Even after dropping, the government’s Eurobond yields average 15.6%, according to Bloomberg data. Read more