Investors holding debt protection on Lebanon are in line to share compensation of $215 million after the government defaulted for the first time in its history, Bloomberg News reported. Firms holding credit swaps on the heavily-indebted nation will receive 86% of the amount covered by the instruments, according to the final results of an auction to settle the contracts on Thursday. Credit default swaps pay out when a borrower fails to pay its debt and are used by investors to make negative bets on borrowers or as hedges for bond investments.
North Africa/Middle East
Abu Dhabi-based KBBO Group, once one of NMC Health Plc’s biggest shareholders, plans to restructure its debt and is weighing strategic options for the business, people familiar with the matter said, Bloomberg News reported. KPMG LLP is advising the privately-held investment firm on the asset review along with ways to address the company’s debt load, according to the people, who asked not to be identified because the information is private.
Oman and Bahrain are stuck on the sidelines of the international debt markets after a record borrowing tally by Gulf Arab economies this month underscored a divide between the region’s strongest and weakest sovereigns, Bloomberg News reported. Facing external financing needs that Goldman Sachs Group Inc. estimates at $5.5 billion this year, Oman and Bahrain are all but shut out from bond funding, waiting for their yields to retreat before wading into the market.
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.
Abu Dhabi Commercial Bank said it has launched a criminal complaint in the capital of the United Arab Emirates in relation to NMC Health, the healthcare group that was put into administration in the UK last week and owes the bank nearly $1bn, the Financial Times reported. The individual suspects, who have been accused of fraud and forgery in the complaint to the attorney-general in Abu Dhabi, comprise a number of the group’s previous management as well as certain current and former shareholders, two people briefed on the complaint said.
NMC Health Plc’s biggest creditors have set up a coordinating committee, taking a major step toward restructuring the $6.6 billion debt pile of the Middle Eastern hospital operator, Bloomberg News reported. The company asked Abu Dhabi Commercial Bank PJSC to chair a coordinating committee of debtholders, NMC’s acting chief executive officer, Michael Davis, wrote in a letter to lenders dated Monday. Deloitte and Clifford Chance LLP have been appointed to advise the committee while Lazard Ltd.
The World Bank is seeing “a huge willingness” on the part of official bilateral creditors to suspend debt payments by the world’s poorest countries so they can focus on fighting the coronavirus pandemic, a top Bank official said on Monday, Bloomberg News reported. World Bank Managing Director Axel van Trotsenburg said the Group of 20 major economies and the Group of Seven (G7) had been largely supportive of a call by the World Bank and International Monetary Fund for a temporary halt in debt payments. “Everybody understands that we need to help the poorest countries.
NMC Health’s administrators have sought to reassure staff that the scandal-ridden hospital operator will still be able to help the United Arab Emirates battle the coronavirus pandemic, the Financial Times reported. As the largest private healthcare provider in the UAE, NMC has an important role in preparing the Gulf state to cope with the outbreak, which has already claimed 22 lives from about 4,100 cases.
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.
The G20 group is planning to offer lower income countries a moratorium on bilateral government loan repayments as part of an “action plan” to tackle the coronavirus pandemic and stave off an emerging markets debt crisis, a senior G20 official said, the Financial Times reported. The initiative, due to be finalised at a finance ministers’ meeting this week, would see a freeze on sovereign debt repayments for six or nine months, or possibly through to 2021, in line with an appeal last month from the IMF and World Bank.