North Africa/Middle East

Libya’s sovereign wealth fund head plans to ask the United Nations to allow it to invest billions of dollars sitting idle in its accounts, after missing out on some $4.1 billion (3.1 billion pounds) in potential equity returns during nearly a decade of sanctions, Reuters reported. The Libyan Investment Authority (LIA) was blacklisted in March 2011 because it was then controlled by the family of toppled ruler Muammar Gaddafi. Its assets were valued at $67 billion in 2012, but LIA plans to update that in October after a review by its financial adviser Deloitte.

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Lebanon may be in line for $298 million in emergency aid after the Beirut port blast, but the more than $30 billion that some estimate it may need to rebuild its shattered economy will not be forthcoming without reform, the International New York Times reported on a Reuters story. Such change could be stalled by the resignation of Lebanon's government, while a financial rescue plan drawn up in April is likely to have to be reviewed and possibly even ditched by a new administration, two financial sources close to the plan said.

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The resignation of Lebanon’s government after last week’s devastating explosion in Beirut threatens to upend any prospect of a debt restructuring deal in the next few months, Yahoo! Finance reported. Senior officials will continue in a caretaker capacity until a new administration is formed. It’s unclear how long that process will take. The Middle Eastern nation defaulted on about $30 billion of Eurobonds in March. Since then, its talks with the International Monetary Fund for a bailout have stalled.

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Lebanon's creditors are wary of the risk of even steeper losses as a devastating blast in Beirut complicates an already stalled debt restructuring process, the International New York Times reported on a Reuters story. Even before Tuesday's explosion in Beirut's port that killed 154 people, progress had been slow on a turnaround from deep financial turmoil that culminated in a default on Lebanon's foreign currency debt in March.

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As emergency services assess the toll from Tuesday’s deadly explosion in Beirut, one immediate consequence is becoming clear to analysts: it will ratchet up pressure on Prime Minister Hassan Diab to make meaningful progress in talks with international lenders and investors, Bloomberg News reported. For some observers, that means quickly addressing the internal divisions and foot-dragging that have stalled negotiations with the International Monetary Fund about a $10 billion loan program following the country’s March Eurobond default.

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Lebanon is hurtling toward a tipping point at an alarming speed, driven by financial ruin, collapsing institutions, hyperinflation and rapidly rising poverty — with a pandemic on top of that, the International New York Times reported on an Associated Press story. On Monday, the country's foreign minister resigned, warning that a lack of vision and a will to implement structural reforms risked turning the country into a “failed state.” The collapse threatens to break a nation seen as a model of diversity and resilience in the Arab world and potentially open the door to chaos.

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Hospital operator NMC Health has secured a $250 million financing facility which will allow it to continue to provide healthcare, its administrators Alvarez & Marsal said, Reuters reported. The loan is conditional on a planned second-phase restructuring, Alvarez & Marsal said on Monday, after its London-listed holding company was forced into administration in April following months of financial turmoil.. The administrators said the restructuring would allow the funding to support operations and stop adverse creditor actions.

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Lebanon may only count on the International Monetary Fund for as little as half the bailout it had originally sought to help unlock other assistance the country critically needs to bridge the crisis, according to a top official, Bloomberg News reported. With talks over a $10 billion loan program stalling for much of this month, the IMF could provide an amount in a range of $5 billion to $9 billion, Economy Minister Raoul Nehme said in an interview with Bloomberg Television. Although Lebanon’s economic collapse is accelerating, Nehme gave no time frame for when a deal might be reached.

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Lebanon had its rating cut to the lowest grade by Moody’s Investors Service, which said that bond investors will likely suffer major losses on their holdings as the government struggles to secure aid to ease a crippling financial crisis, Bloomberg News reported. Moody’s lowered Lebanon’s credit score to C from Ca, the same level as crisis-ravaged Venezuela. It reflects Moody’s “assessment that the losses incurred by bondholders through Lebanon’s current default are likely to exceed 65%,” the agency said in a statement.

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Hyperinflation has blighted Zimbabwe, Venezuela and the former Yugoslavia among others over the years, Reuters reported. Now, Lebanon has been gripped by the phenomenon, becoming the first country in the Middle East and North Africa to suffer from rapid, runaway price rises for goods and services. It joins Venezuela, which has been locked in hyperinflation since April, its second bout in recent years, according to Steve H. Hanke, Professor of Applied Economics at the Johns Hopkins University and an expert on the topic.

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