Lebanon Seeks International Experts Counsel to Handle Eurobonds

Upon the conclusion of Tuesday’s Council of Ministers session, Lebanese Minister of Information Manal Abdel Samad announced the government’s decision to approve firms of international law and investment for financial and legal advice, ahead of the upcoming Eurobond repayment.

Lebanon has recently requested technical assistance from the International Monetary Fund to deal with the foreign bond that matures on March 9th, in addition to the ones that will follow in 2020.

As Lebanese officials expectedly steer towards the restructuring of the sovereign debt, they’ve just approved the US-based white-shoe law firm Cleary Gottlieb Steen & Hamilton LLP to advise them on the legal aspects of the process, Reuters reported.

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In addition to Cleary Gottlieb Steen & Hamilton LLP, Lebanon has also authorized the US-based asset management company Lazard for financial advice.

Lazard is the world’s largest investment bank and is known to have advised several countries that were dealing with heavy debt, including Argentina, Greece, and Ukraine.

A French subsidiary of Lazard called Lazard Freres, for example, guided Argentina through its infamous 2002 financial crisis, during which it had an overwhelming sovereign debt value of $100 billion.

In addition to Lazard, 12 asset management companies had offered to financially advise the Lebanese government, including Rothschild, Guggenheim Partners, Houlihan Lokey, Citibank, and JPMorgan Chase.

This was when the Ministry of Finance requested on Friday, February 21st, international proposals regarding its debt restructuring, which Lebanon is expected to undergo soon.

In the same context, Speaker of Parliament Nabih Berri had previously mentioned that restructuring Lebanon’s sovereign debt is “the perfect solution” to the nearest maturing foreign Eurobond of $1.2 billion, due on March 9th.

A prominent French source recently expressed France’s fears that Lebanon’s economy might resemble that of Somalia in the future if it defaults on the dollar bonds.

Currently, Lebanon carries a debt of over $100 billion, which is more than twice the value of its gross domestic product. If the country does default on the upcoming repayment, which seems to be the most likely option, it will be the first time in its history.

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