The country is on course for the first default in its history
Netty Ismail
“We are entering uncharted territory and the crisis is set to become increasingly more complex,” said Ehsan Khoman, head of Middle East and North Africa research and strategy at MUFG Bank n Dubai. “The market’s attention will now turn to complicated deliberations with bondholders on overhauling the entire debt profile. This is no easy task and there is no quick fix.”
“Creditors have begun the efforts to open the appropriate lines of communication with Lebanon and its advisers,” said Hans Humes, CEO of New York-based distressed-debt investor Greylock Capital Management, which had formed a group to talk to the government about its options.It isn’t clear if Lebanon will seek an International Monetary Fund bailout. Though IMF experts recently held meetings in Beirut, the issue of securing financing from the fund has become entangled in politics.
“The IMF involvement will be tricky given the current US policies,” said Humes at Greylock Capital. “There is no question that the heightened tension between US and Iran has complicated the situation in this and many other ways.”One question is whether the government will make a distinction between local and foreign bondholders, Fitch Ratings said in a report in February.
There is also concern over litigation risk, including the probability that some foreign investors could file a lawsuit asking the authorities in the US to impound Lebanon’s physical gold assets there, according to Fitch.Lebanon’s looming default is a blow for Ashmore Group, which was attracted to the bonds’ valuations as they tumbled in 2019 and had bet the government would pay out.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Aspen Pharmacare may pay dividends for 2020 yearAfrica’s largest pharma company says it is comfortable with its progress in cutting debt, an issue that has punished its share price
Read more »
Another blow for crisis-ridden Prasa - The Mail & GuardianAdding to the debt-ridden state entity’s woes, the rail agency now faces prosecution for anti-competitive conduct regarding bus terminals and services
Read more »
David Masondo says government in ‘serious’ talks with labour unions over wage billDeputy finance minister tells the Association of Black Securities and Investment Professionals that Eskom’s problem is not just its debt but largely about its cost structure
Read more »
Why Soweto residents do not owe Eskom R18-billion - The Mail & GuardianThis debt should be deemed a subsidy, an external cost that the government must bear for inadequate service delivery.
Read more »
Senzo Mchunu sets his sights on high earning state officialsThe government is taking aim at the hefty salaries of executives at state-owned enterprises (SOEs), board fees, the salaries and benefits of judges and the perks of MPs, in a move to contain public sector expenditure and reduce state debt.
Read more »
Support our plan or face more load-shedding, says EskomDe Ruyter took over Eskom at a time when the SOE is saddled with R454bn of debt and isn’t generating enough revenue to cover its costs. Regular outages due to plant breakdowns have pushed the economy into a recession.
Read more »