ABL Urges Eurobond Negotiations with Bond Holders

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The Association of Banks in Lebanon on Wednesday called for negotiations with the holders of Lebanon’s Eurobonds regarding the March 9 payment.

“We stressed to Mr. Premier ABL’s stance that if the government is inclined to reschedule the debt, this rescheduling must happen in an organized manner, which means through negotiations with bond holders, especially that the foreign investment funds have so far showed readiness to negotiate on this basis,” ABL chief Salim Sfeir said after meeting PM Hassan Diab along with a delegation from the Association.

“We emphasize that ABL’s objective has been and is still to safeguard the continuity of public facilities and to preserve the deposits with which the banks are entrusted,” Sfeir added.

“I remind that any decision regarding the Eurobond issue is for the government to take exclusively in light of what it sees appropriate for Lebanon,” Sfeir went on to say, noting that Diab “expressed his keenness on the safety and continuity of the banking sector in a manner that preserves depositors’ rights and regulates banks’ relation with client.”

Lebanon has the world’s third-highest debt-to-GDP ratio and has been sliding towards default in recent months, with tight capital controls and a currency devaluation already hitting purchasing power.

An International Monetary Fund delegation will arrive in Beirut Thursday to provide advice on the nation’s economic policies.

Diab’s government won parliament’s confidence only last week, and the state immediately requested the IMF’s advice on tackling the economic crisis.

Lebanon is expected to decide whether to pay $1.2 billion in Eurobonds that reach maturity on March 9 or to default on its debt.

Lebanon has requested help from the IMF to assess the measures needed to rebuild the economy but has not yet asked for financial assistance.

SourceNaharnet

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