Lebanon was downgraded deeper into junk by two of the three biggest credit rating companies Friday as the nation’s bondholders braced for a potential default next month, Bloomberg News reported. S&P Global Ratings cut the country’s long-term foreign currency rating to CC, following a similar reduction by Moody’s Investors Service to Ca earlier in the day. That puts Lebanon’s rating below the likes of Argentina, Mozambique and the Democratic Republic of Congo.
North Africa/Middle East
An International Monetary Fund delegation began meetings Thursday in Lebanon to provide advice on dealing with the country's crippling economic and financial crisis amid concerns the country might default on its Eurobond debt payment for the first time, the International New York Times reported on an Associated Press story. Lebanon is going through its worst economic crisis since the 1975-90 civil war. Since then, the country has been marred by widespread corruption and mismanagement in which billions of dollars were spent on infrastructure, which remains mostly dysfunctional.
NMC Health Plc founder Bavaguthu Raghuram Shetty hired Houlihan Lokey Inc. to explore strategic options for his holding company, including a potential debt restructuring or the sale of some assets, according to people familiar with the matter, Bloomberg News reported. The investment bank is working with BRS Ventures Investment to revamp debt and seek potential investment partners or sell assets from the portfolio, which holds 30 companies including hospital operator NMC and financial services firm Finablr Plc, according to the people.
Lebanon’s financial situation points to a likely restructuring of the country’s massive debt and financial sector to preserve declining foreign currency reserves, Fitch Ratings said Tuesday. The credit rating agency’s report comes as Lebanese officials are debating whether to pay back $1.2 billion worth of Eurobonds that mature on March 9 amid a severe economic and financial crisis, the worst since the country’s 1975-90 civil war, Egypt Independent reported. Lebanon has never defaulted before, and the decision is causing much anxiety in the crisis-hit country.
A row has broken out between some of Lebanon’s biggest foreign creditors as the country slides towards a restructuring of its enormous debt burden. Ashmore, which has amassed a more than $1bn position in Lebanon’s short-dated bonds, is pushing for Beirut to repay a dollar bond that matures next month, despite the parlous state of the country’s finances, the Financial Times reported. The fund manager’s lobbying has drawn criticism from other big emerging-market investors, which boiled over at a client dinner hosted by Bank of America in London last month.
Dubai will take its port operator private after a dozen years to alleviate its debt burden and avoid a repeat of the economic crisis that forced a bailout of the country in 2009, Bloomberg News reported. As a source of cash for the state, DP World Ltd. is a key asset for the emirate as it endures another year of lower property prices and a struggling retail sector. The country has introduced some counter-measures to revive growth, like easing restrictions on visas and tackling oversupply in the real-estate market.
Cash-strapped Lebanon is set to request technical assistance from the International Monetary Fund (IMF) on Thursday, according to a senior political source. The source told Reuters on Wednesday that the formal request will be sent “in the coming hours” for advice on how to help stabilise the country’s nose-diving economy, and potentially restructure its debt, Middle East Eye reported. Lebanon has a $1.2bn Eurobond maturing on 9 March and is apparently seeking advice on whether to pay it.
Lebanon needs the help of the International Monetary Fund to draft a rescue plan and decide whether to repay its $1.2 billion Eurobond maturing next month, a local newspaper cited a veteran politician and member of the ruling coalition as saying, Bloomberg News reported. With the country facing its worst financial crisis in decades after months of protests, parliament Speaker Nabih Berri said Lebanon should form a task force comprising the premier, ministers of economy and finance as well as legal and financial experts, Annahar newspaper reported.
Some foreign holders of Lebanon’s bonds are expressing support for a government debt restructuring as the clamor grows among local politicians to skip a payment due in weeks, Bloomberg News reported. At a private meeting days ago with government representatives, a number of foreign funds that own Eurobonds, including a $1.2 billion note due March 9, argued that Lebanon would be better off restructuring rather than paying its debt, said a person familiar with the matter, declining to identify the investors.
Lebanon’s cash-strapped authorities are struggling to decide what to do about a $1.2 billion Eurobond maturing in March but are leaning towards repayment for foreign holders and a swap for local investors, political and banking sources said on Tuesday, Reuters reported. Lebanon, which has never defaulted on its hefty debt, is in the throes of a financial and economic crisis that has shattered confidence in banks and ignited protests against a political elite blamed for steering the country towards collapse.