#Lebanon Slammed by Double Downgrade as Investors Warn of Default - Bloomberg

Lebanon Slammed by Double Downgrade as Investors Warn of Default - Bloomberg:

Lebanon was downgraded deeper into junk territory by two of the three biggest credit rating companies Friday as the nation’s bondholders brace for a potential default next month.

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 among the likes of Argentina, Mozambique and the Democratic Republic of Congo, other nations teetering near default.

The moves cap a turbulent week in which a bank run intensified, the World Bank warned of “implosion” and the yield on Lebanon’s Eurobonds that mature next month skyrocketed to more than 1,000%.

“A distressed exchange or unilateral default on Lebanon’s commercial debt is virtually certain,” S&P analysts led by Zahabia Gupta wrote in a statement. “Social unrest, a contracting economy, and intensifying liquidity pressures in the private sector will make it politically difficult to repay creditors in 2020.”