All but cut off from international credit markets and facing dollar shortages at home, Lebanon has come up with another workaround to allow the government to borrow money without raiding the central bank’s reserves, Bloomberg News reported. Local lenders, already the biggest holders of Lebanon’s sovereign debt, will cash out certificates of deposit, or CDs, at the central bank to buy some of Lebanon’s planned Eurobond issue of up to $3 billion, a person familiar with the matter said.

The United Arab Emirates lifted a ban on its citizens visiting Lebanon on Monday as the Beirut government sought UAE help in steering the heavily indebted economy out of deep crisis, Reuters reported. Prime Minister Saad al-Hariri, leading a delegation to Abu Dhabi seeking support, had told Reuters he was hoping the UAE would inject cash into its central bank. Before the lifting of the travel ban was announced, Hariri said he was “optimistic” after visiting the UAE and meeting with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan.

Lebanon may need support from loyal local banks or even friendly Gulf states to buy a new Eurobond as foreign investors look set to shun the sale, citing the country’s long list of troubles, Reuters reported. A Eurobond of around $2 billion is being prepared for sale this month, with cash raised earmarked for refinancing maturing debts and shoring up Lebanon’s shaky public finances. But international appetite appears muted, with fund managers wary of putting money into one of the world’s most indebted countries as it grapples with a multitude of national and geopolitical concerns.

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.

Lebanon’s central bank has secured up to $1.4 billion in five-year deposits from private investors overseas, boosting dollar reserves in one of the world’s most-indebted countries and easing concerns that it could struggle to repay its debts and defend its currency, Bloomberg News reported. Governor Riad Salameh said in an interview with Bloomberg TV in Beirut that Banque du Liban remains committed to preserving the Lebanese pound’s peg of about 1,507.5 to the dollar, in place for more than two decades, and has “ample” cash to do so.

Lebanese Parliament Speaker Nabih Berri said he had a “positive” feeling over a sovereign credit rating report expected later this week, although he had no information about it, Lebanese newspaper al-Joumhouria reported on Wednesday, Reuters reported. Lebanon, saddled with one of the world’s heaviest public debt burdens and blighted by years of low economic growth, is seeking to put its public finances on a sustainable path by implementing long-delayed economic reforms. However, markets have been pricing in the risk of a sovereign credit rating downgrade in recent days.

Dollar-denominated bonds issued by Lebanon’s government dropped to new lows on Tuesday on worries about the risk of a sovereign credit rating downgrade by S&P Global, Reuters reported. The 2027 issue slumped by 2 cents in the dollar to trade at its lowest level, while the 2026 issue shed 2.4 cents to also reach a new low, according to Tradeweb data. “There’s an upcoming rating review by S&P and people are focusing on the possibility of a downgrade,” said Giyas Gokkent, of JPMorgan Securities.

Lebanon’s sovereign ranking will probably be cut deeper into junk by S&P Global Ratings within days, putting its bonds into a category considered vulnerable to nonpayment as the country struggles to claw back enough foreign currency, according to Goldman Sachs Group Inc, Bloomberg News reported. One of the world’s most indebted nations is on negative outlook at S&P, which is due to publish a review on Friday and currently rates Lebanon B-, six steps below investment grade and one notch higher than Moody’s Investors Service.

The cost of insuring exposure to Lebanon’s sovereign debt rose to a record high on Friday after the president warned of the risk of harsh financial measures from international institutions unless sacrifices were made to save the country from economic crisis, Reuters reported. Lebanon’s five-year credit default swaps (CDS) rose to 990 basis points (bps), up 33 bps from Thursday’s close, data from IHS Markit showed.

The Lebanese government is deferring payments to contractors and public entities, improving the budget numbers but endangering a lifeline for businesses, Bloomberg News reported. Delayed payments for this year alone have exceeded $900 million, pushing the outstanding total to over $2 billion, according to a person familiar with the matter. The government owes contractors about $300 million, half of which was incurred in 2019, said Maroun Helo, head of the Lebanese Contractors Syndicate of Public Works and Buildings. Contractors are defaulting on debt, he said.