Lebanon has reached out to the IMF to discuss its draft rescue plan in hopes of winning much-needed aid after defaulting on its debt, Prime Minister Hassan Diab said. “The finance ministry initiated contact with the International Monetary Fund, from which we have positive feedback on the financial plan, taking into consideration first and foremost the interest of the Lebanese,” he said in a televised speech, Bloomberg News reported. Lebanon’s government is discussing a program to revive its ailing economy and restructure its debt as well as its banks.

Lebanon’s bondholders will have at least 70 per cent wiped off the value of their holdings, according to an analysis of the government’s plan to restructure the country’s huge debts, the Financial Times reported. Lebanon, which defaulted on its $30bn of foreign-currency bonds in February, offered the first hints as to how it plans to return its debt to a sustainable level in a draft document circulated on Wednesday.

Defaulted Lebanon gave the first glimpse of its restructuring plans by setting a goal of halving one of the world’s biggest debt burdens as early as this year and moving to a more flexible exchange rate, according to a draft document seen by Bloomberg. The government is discussing a reform plan submitted by the Finance Ministry and drafted by a group of advisers including other ministries and Lazard Ltd, Bloomberg News reported.

Lebanon’s foreign-exchange crisis is intensifying, prompting another appeal by the government for financial aid after its debt default last month, Bloomberg News reported. Local banks have reduced the amount of dollars customers can withdraw from their accounts and even forced them to accept conversions into the local currency in some instances. Two of the largest have almost stopped dispensing foreign exchange entirely, while the central bank has greatly cut its supply, said senior bankers, who didn’t want to be named.

Lebanon said it will allow small depositors to withdraw funds from dollar accounts at a weaker rate than the decades-old fixed regime, the first official move away from the country’s currency peg amid a severe liquidity crisis, Bloomberg News reported. With hardly any dollars circulating in the banking system, lenders will pay out at a “market rate” in Lebanese pounds to clients with accounts of up to $3,000, according to a central bank circular issued Friday.

Lebanon kicked off talks to restructure its $90 billion debt pile on Friday with a promise to present a comprehensive recovery plan for its “broken” economy before the end of this year, Bloomberg News reported. In a video presentation to bondholders, Lebanon’s top finance officials said the economic overhaul would require external funding, but did not set concrete targets for cutting the deficit or restoring growth and spoke only in general terms about the steps required.

Chairman of the Association of Banks in Lebanon (ABL) Salim Sfeir announced plans to donate $6 million to government hospitals battling coronavirus, in a press conference yesterday, the Middle East Monitor reported. The money from the ABL will be used to purchase 120 respirators for treatment of coronavirus patients across Lebanon, according to a statement from Sfeir’s office. During a meeting between Sfeir and Lebanon’s Prime Minister Hassan Diab on Tuesday, ABL’s chairman handed the government a cheque for the $6 million and said that “today Lebanon is enduring a great national trial.

Lebanon faces a complex and difficult debt restructuring that could take up to two years, Morgan Stanley has estimated, though the recent slump in its bonds has left them looking cheap even if the harshest scenarios play out, Reuters reported. Lebanon, one of the most indebted countries in the world, suspended payments on all $31.3 billion of its international ‘eurobonds’ this month, declaring that it could no longer repay them.

Lebanon will begin the process of restructuring its roughly $30 billion of Eurobonds with an investor presentation on March 27, despite the coronavirus outbreak roiling global markets and paralyzing travel, Bloomberg News reported. The government, which defaulted this month, asked its financial adviser, Lazard Ltd., to initiate talks with investors, the Finance Ministry said in a statement Monday. The government “is developing a sustainable macroeconomic plan to redress the Lebanese economy,” the ministry said.

Sovereign bond restructurings are rarely smooth. Lebanon’s looks like it will be particularly rocky. The rules underpinning the nation’s looming debt overhaul may complicate efforts to gather enough support to change the terms of its bonds, Bloomberg News reported. At the same time, they could protect the country from some of the issues that left Argentina with lengthy court battles.