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Lebanon to Ask for 7-Day Grace Period for Eurobond

Lebanon to Ask for 7-Day Grace Period for Eurobond

Thursday, 27 February, 2020 - 09:00
FILE PHOTO: A general view shows a street hosting banks and financial institutions, known as Banks Street, in Beirut Central District, Lebanon September 28, 2018. REUTERS/Jamal Saidi/File Photo
Asharq Al-Awsat

Lebanon intends to ask for a seven-day grace period for a $1.2 billion Eurobond that matures on March 9, as it is entitled to, in order to give financial advisers more time to draft a restructuring plan, a government source said on Thursday.

Lebanon would seek the seven-day grace period ahead of the March 9 date, the source told Reuters.

The Lebanese government this week appointed US investment bank Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP as its financial and legal advisers on the widely expected debt restructuring.

Lebanon's long-brewing economic crisis came to a head last year as capital inflows slowed and protests erupted against the ruling elite over corruption and bad governance - root causes of the crisis.

Lebanon on Wednesday paid $71 million in coupons due on Eurobonds maturing in 2025 and 2030, a source familiar with the matter said.

Credit ratings agency S&P lowered Lebanon's debt grade a notch on Friday, but warned a further cut is possible should the government miss the Eurobond payment to creditors.

S&P Global Ratings lowered the sovereign credit rating to CC from CCC with a negative outlook, the agency said in a statement.

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