Lebanon News: Debt Plan to End Crisis Sputters - Bloomberg:
Lebanon’s plan to steer through its debt crisis by getting local investors to swap into longer-dated Eurobonds has come unstuck after rating companies warned they would consider it a “selective default,” a person familiar with the matter said.
The Finance Ministry sent a letter to the central bank Wednesday asking it to hold off on the deal, according to the person, who asked not be identified because the information isn’t public. Based on their communication with the ministry, rating companies could declare Lebanon to be in breach of its obligations “because it is considered a distressed exchange,” the person said.
Given the threat to the sovereign rating, the ministry has asked the central bank not to pursue the transaction until the government decides on a financing plan for its Eurobonds maturing in 2020, according to the person.
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