Lebanese Banks Mull Committee for Debt Talks With Government
Lebanese Banks Mull Committee for Debt Talks With Government
(Bloomberg) -- Lebanon’s banks are looking into forming a committee that would handle negotiations with the government in case it announces a sovereign debt restructuring.
The committee would represent local lenders in any future talks, according two people familiar with the plans who asked not to be identified because the discussions are private. The banks have also been approached by financial advisers, they said.
Lebanese lenders hold almost $14 billion of government Eurobonds, or around half of the outstanding stock and have lobbied against a default. But lawmakers say a restructuring is necessary to help preserve the country’s dwindling foreign-exchange reserves.
The government is due to decide Saturday on whether it will make a $1.2 billion bond repayment due next week. The cabinet is scheduled to convene at 1 p.m. and Prime Minister Hassan Diab will address the nation after the session.
Last month, the government hired Lazard Ltd. and law firm Cleary Gottlieb Steen & Hamilton to help ministers decide whether or not to default on its obligations.
Distressed-debt investors Greylock Capital Management, Lugano-based Mangart Capital Advisors and other bondholders have already formed a group for potential discussions.
To contact the reporters on this story: Dana Khraiche in Beirut at dkhraiche@bloomberg.net;Nicolas Parasie in Dubai at nparasie1@bloomberg.net
To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, ;Riad Hamade at rhamade@bloomberg.net, Constantine Courcoulas, Marton Eder
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