North Africa/Middle East

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.

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Troubled UAE hospital operator NMC Health said on Tuesday its debt pile now stood at $6.6 billion, much higher than earlier estimates, and that it has appointed a former PwC partner as chief restructuring officer to tackle the problem, Reuters reported. The company, which has been in crisis since U.S. firm Muddy Waters' short attack, revised its debt position from $5 billion earlier in March, and named Matthew J.

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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.

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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.

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The bonds of emerging-market nations are entering distressed territory at an alarming rate as the soaring dollar raises the prospect of government defaults, Bloomberg News reported. Fifteen nations with more than $100 billion of Eurobonds outstanding now have average spreads of at least 1,000 basis points over U.S. Treasuries, which many investors consider to be the threshold for debt to be classed as distressed. And that doesn’t even include Lebanon, which defaulted this month, and Argentina, which has begun restructuring talks with bondholders.

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Banks from Qatar, the United Arab Emirates and India risk losing millions of dollars due to their exposure to Finablr Plc, the foreign-exchange operator that’s preparing for potential insolvency, according to people with knowledge of the matter, Bloomberg News reported. Qatar National Bank, Doha Bank, National Bank of Fujairah, Commercial Bank International and Bank of Baroda are still owed about $300 million by Finablr’s parent BRS Ventures, which is owned by Bavaguthu Raghuram Shetty, some of the people said, asking not to be identified because the matter is private.

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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.

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Oman’s ministry of finance has cut by 5% the budget allocated to government agencies for 2020, according to two sources and a government circular seen by Reuters. The decision was “in response to the financial challenges of the country,” a source at the ministry of finance said. Oman, a small Gulf oil producer rated ‘junk’ by all major rating agencies, is expected to see its deficit widen this year because of lower oil prices, Reuters reported.

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With distressed debt investors and emerging markets funds suddenly faced with one of the sharpest asset price falls in a generation, Lebanon picked the wrong time to go bankrupt, Reuters reported. Funds are still circling as the clock ticks down on Lebanon’s first sovereign default, but some may not buy until after the government unveils plans to revamp the debt and reform its economy, and the dust settles on a global asset plunge.

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Iran is seeking financial aid from the International Monetary Fund for the first time since the 1960s as it tries to fight a major outbreak of the coronavirus, Bloomberg News reported. Abdolnaser Hemmati, the head of the Central Bank of Iran, said in an Instagram post that he requested approximately $5 billion from the body’s Rapid Financing Instrument. The fund has said it would make $50 billion available to help member countries deal with the epidemic.

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