UPDATE 1- #Lebanon may need 70% debt write off, 50% currency drop, say economists - Reuters

UPDATE 1-Lebanon may need 70% debt write off, 50% currency drop, say economists - Reuters:

Lebanon’s bond holders may have to write off 70% of their investments and the value of the country’s currency might be cut in half in an International Monetary Fund rescue, analysts crunching the numbers on its debt woes estimate.

Lebanon formally requested the IMF’s technical help on Wednesday as it tries to avoid a full-blown economic collapse. Whether that turns into a formal bailout remains to be seen, but analysts have started to evaluate possibilities.

“Past experience suggests that this will involve haircuts of up to 70%,” Capital Economics’ Jason Tuvey wrote in a note, referring to debt write-offs.

That would wipe out banks’ capital, and the cost of re-capitalising them would come to around 25% of Lebanon’s gross domestic product, though IMF technical assistance could help limit the strains.