Lebanon May Ask Banks to Buy Back Bonds Sold to Foreign Funds
Lebanon May Ask Banks to Buy Back Bonds Sold to Foreign Funds
(Bloomberg) -- Lebanese officials are considering asking local banks to buy back Eurobonds they sold to foreign funds, after the transactions gave outside creditors more leverage in a potential restructuring discussion if the government decides to default, former Finance Minister Ali Hasan Khalil said.
Khalil, who was at a meeting Monday with bankers and officials to discuss whether to repay a $1.2 billion Eurobond due next week, said that one of the ideas discussed with lenders was to have them buy back “enough” debt to regain a majority of votes in restructuring talks, according to a statement carried by Al-Akhbar newspaper.
Lebanon needs the approval of 75% of bondholders of each Eurobond series to agree on restructuring terms.
Local banks should buy back the bonds from their own funds and not use depositors’ money because they also bear responsibility for Lebanon’s crisis, according to the former minister, who’s a close aide to Parliament Speaker Nabih Berri.
Khalil said he shares the opposition of the party he represents to repaying the debt.
To contact the reporter on this story: Dana Khraiche in Beirut at dkhraiche@bloomberg.net
To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Paul Abelsky
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