Standard & Poor's credit rating agency downgraded Lebanese treasury bonds to the "default" category, after the government failed to pay them in time, revealing the aggravation of the economic crisis following the catastrophic explosion that occurred in Beirut's port in early August.
The agency indicated that it maintained Lebanon's credit rating on selective default (SD), a degree to which Lebanon declined after defaulting for the first time in its history to pay its creditors' dues on time last March, while it downgraded three classes of Lebanese treasury bonds. From "CC" to the point of "defaulting".
According to the agency, the catastrophic explosion in Beirut will exacerbate the economic crisis in the country, warning that in the event that a political vacuum occurs for a long time or a weak new government is formed, this will lead to further delays in political reforms, foreign aid and debt restructuring negotiations.
The agency has warned that without a strong commitment to implementing economic, financial and monetary structural reforms, and in the absence of political support provided by an IMF program, we expect the debt restructuring negotiations to extend beyond 2020. Noting that even before the recent events, Lebanon had made only limited progress in engaging creditors in debt restructuring negotiations.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
