Lebanon to Kick Off $30 Billion Eurobond Restructuring Talks This Week

(Bloomberg) --

Lebanon will begin the process of restructuring its roughly $30 billion of Eurobonds with an investor presentation on March 27, despite the coronavirus outbreak roiling global markets and paralyzing travel.

The government, which defaulted this month, asked its financial adviser, Lazard Ltd., to initiate talks with investors, the Finance Ministry said in a statement Monday.

The government “is developing a sustainable macroeconomic plan to redress the Lebanese economy,” the ministry said. It did not give details on who would make the presentation, where it would be held or whether investors could attend in person.

Lebanese officials have said they are working to restructure the government’s entire debt, which totals around $90 billion when local-currency liabilities are included.

The country’s been hit by anti-government protests since October and its debt ratio of more than 150% of gross domestic product is one of the highest in the world.

As well as foreign investors, Lebanese officials will have to negotiate with local banks, who own the bulk of the nation’s Eurobonds. They have criticized the government’s decision to default when it opted not to repay a $1.2 billion bond that matured on March 9.

Finance Minister Ghazi Wazni has said the country would only accept a bailout from the International Monetary Fund if it didn’t have political conditions. Many in Lebanon are concerned the U.S. would make any IMF loan conditional on Lebanon reining in Iran-backed Hezbollah, a major powerbroker in the country and which Washington considers a terrorist organization.

Exacerbating its economic malaise, Lebanon is in near lockdown as the government tries to stop the spread of the coronavirus. Prime Minister Hassan Diab’s cash-strapped administration has appealed for help from abroad.

Lebanon will use its dwindling foreign-currency reserves “with wisdom and caution,” the ministry said in the statement.

©2020 Bloomberg L.P.

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