"Telemer" revealed in a research report issued by it, that Lebanon's international bonds that are already being traded at some of the lowest levels of sovereign bonds in the world may incur further decline, if the situation continues without support from the International Monetary Fund and the implementation of reforms.
Lebanon suspended its talks with the International Monetary Fund after a dispute on the Lebanese side over the extent of losses in the financial system and the suspension of the start of reforms aimed at treating the root causes of the turmoil.
In this context, Patrick Couran, a senior economist at the Investment Research Company and one of the authors of the report, pointed out that "the risks of Lebanon's international bonds tend toward the negative side", considering that "the longer this stalemate persists, the more difficult it will be to implement the required reforms and obtain the support of the International Monetary Fund," and if they can't do that, there is definitely a risk of a further fall in international bonds, and even if they agree to a restructuring and program from the International Monetary Fund, they must commit to reforms for a long time in order to put debt on a sustainable path.
According to "Telemer", in light of the worst scenarios, which involves the government starting to restructure its debt and extend the maturities of five years but without going ahead with reforms, the bonds due in 2025, which are currently being traded at 16.8 cents, can drop to 7.8 cent.
Source (Al-Arabiya.net website, Edited)
