Lebanon central bank governor has been asked to hold off on proposed Eurobond swaps - source

Lebanon's caretaker finance minister has asked the central bank governor to hold off on a proposed swap of 2020 Eurobonds after ratings agencies warned that it could constitute a selective default, a source familiar with the matter said on Wednesday.

In a letter to central bank governor Riad Salameh, caretaker finance minister Ali Hassan Khalil said the government needed to first decide how it will finance its bonds maturing in 2020, the source said.

Khalil recognized the central bank's right to manage its own bond portfolio but asked it to hold off on the swap, in which local holders of debt would take longer-dated notes, because of the potential sovereign rating implications, the source added.