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Lebanon weighs plans for potential dollar debt sale

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Fitch Ratings downgraded Lebanon to CCC last month on debt-servicing concerns, while S&P Global affirmed Lebanon’s credit rating at B-/B with a negative outlook, saying it considered Lebanon’s foreign exchange reserves sufficient to service government debt in the near term.

Sunday 15, September 2019 BY MUZORIWA KUDAKWASHE

The Lebanese finance minister said that the government is still considering the possibility of a new dollar debt sale and has not yet announced any issuance, reported Reuters.

Ali Hassan Khalil, the Lebanese Finance Minister, said that one option in front of Lebanon for paying its debt obligations for the year would be to issue $1.5-2 billion in dollar bonds, the country has a key $1.5 billion bond repayment coming up on 28 November 2019.

Beirut has not issued Eurobonds since a $3 billion sale in May 2018 that came shortly after a $5.5 billion debt swap with Banque du Liban, which was issued with Eurobonds in exchange for Lebanese pound T-Bills.

Eurobond yields have risen to new highs amid growing regional political tensions and slow progress by politicians on enacting reforms needed to secure the international donor funding and put the economy on a sound footing.

Additionally, the Lebanese finance minister also said that he passed the draft 2020 budget to the cabinet—which will then debate it—with a lower deficit projection than in the 2019 budget.

Lebanon has one of the world’s highest debt burdens, low growth and crumbling infrastructure and the government has vowed to implement long-delayed reforms to ward off the economic crisis.

TAGS : CCC, debt sale, Eurobonds, Lebanese pound T-Bills

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