Lebanon’s sky-high bond yields and credit default swaps may start to dip if a new government unveiled this week can ease concerns about a sovereign default, Bloomberg News reported. Investors are watching a $1.2 billion Eurobond, payment for which is due on March 9. Its price has risen this week due to the formation of the government, ending a period of caretaker rule since protesters forced the resignation of the prime minister in October. But it’s still trading at just 84 cents on the dollar, equating to an annualized yield of around 170%.

Lebanon’s new government faces huge upcoming debt repayments and a currency peg at breaking point, but it may already have run out of the hard cash firepower it needs to tackle these problems, Reuters reported. The heavily indebted country faces hefty bond repayments coming up in March and April, when $1.34 billion and $842 million of interest and principal respectively come due. Analysts expect the central bank to be able to foot the bill, for now, though some in Beirut believe a rescheduling or restructuring is preferable.

Lebanese authorities will be reluctant to announce a default on debt payments until a functioning government is formed, pushing back any plans for a bond restructuring to later this year, according to Oxford Economics, Bloomberg News reported. Investors can reap a 13% return by buying Lebanon’s dollar-denominated note due March 9, London-based strategist Nafez Zouk said in an emailed note. While there’s an 85% probability those bonds will be repaid at maturity, dwindling foreign-currency reserves mean a default may still be announced in the second half of 2020, Zouk said.

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.

Lebanon’s government has been warned by rating companies that a proposed Eurobond swap with local banks would be considered a “selective default,” a person familiar with the matter said, Bloomberg News reported. The Finance Ministry sent a letter to the central bank Wednesday asking it to hold off on the deal, according to the person, who asked not be identified because the information isn’t public.

Bank Audi SAL received several expressions of interest to buy its Egyptian unit, according to an official from the bank, Bloomberg News reported. Lebanon’s biggest lender by assets held informal talks with institutions that are seeking to expand their operations in Egypt or enter in the north African country, the official said, asking not to be identified because the information isn’t public. Bank Audi hasn’t made a decision, the official said. Arabiya television was first to report that the bank plans to sell the unit as part of a restructuring.

Lebanon’s sovereign debt is probably going to be restructured in a way that hurts neither the economy nor depositors, and foreign holders will be repaid, the banking association head said on Monday, Reuters reported. Salim Sfeir also said he did not foresee problems with a proposal for Lebanese banks to swap their holdings in a maturing March Eurobond of $1.2 billion for longer dated notes, describing such swaps as “common practice”.

Lebanon’s central bank wants local holders of a $1.2 billion Eurobond maturing in March to swap into new notes as part of an effort to manage its debt crisis, Bloomberg News reported. “We are making preemptive proposals that are voluntary” and dependent on the consent of Lebanese banks, Governor Riad Salameh said in an interview in Beirut. “We haven’t taken any decision yet because we don’t have a government.” The plan would help the Arab nation, one of the world’s most indebted, as it struggles with its worst economic crisis in decades.

Lebanon needs a $20 billion-$25 billion bailout including International Monetary Fund support to emerge from its financial crisis, former economy minister Nasser Saidi told Reuters on Friday, Reuters reported. Lebanon’s crisis has shattered confidence in its banking system and raised investors’ concerns that a default could loom for one of the world’s most indebted countries, with a $1.2 billion (917.01 million pounds)Eurobond due in March.

In 2008, as mountains of bad debt collapsed and economies around the world crumbled, carefree gamblers at the central bank-owned Casino du Liban rolled dice and spun roulette wheels, the Financial Times reported. Unscathed by the global financial crisis, Beirut glittered as the Middle East’s party capital and purveyor of discreet financial services. Lebanon offered wealthy investors something they could not get elsewhere — high interest rates for low risk investments.