Lebanon Slammed by Double Downgrade as Bond Default Looms - Bloomberg:
Lebanon was downgraded deeper into junk 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’s rating below the likes of Argentina, Mozambique and the Democratic Republic of Congo.
The moves cap a turbulent week for Lebanon in which a bank run intensified, the World Bank warned of “implosion” and the yield on the government’s Eurobonds maturing 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 said 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.”
Lebanon was downgraded deeper into junk 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’s rating below the likes of Argentina, Mozambique and the Democratic Republic of Congo.
The moves cap a turbulent week for Lebanon in which a bank run intensified, the World Bank warned of “implosion” and the yield on the government’s Eurobonds maturing 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 said 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.”
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