Fitch Ratings has decided to affirm Lebanon’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at Restricted Default (RD). Simultaneously, it has downgraded Lebanon’s Long-Term Local-Currency (LTLC) IDR to RD from CC and Short-Term Local-Currency (STLC) IDR to RD from C.
Lebanon remains in a state of RD on its foreign-currency government debt, following its failure to pay the principal on the Eurobond that matured on March 9, 2020. The government has stopped servicing its outstanding stock of Eurobonds, pending a debt restructuring.
The decision to downgrade the LTLC and STLC IDR to RD reflects the government’s failure to pay interest on Banque du Liban’s (BDL) holdings of local-currency securities issued by the government.
