Lebanon to take decision on Eurobonds next week

Lebanon will take a decision on its Eurobonds -- including one maturing on March 9 -- in the coming week, information minister Manal Abdel Samad Najd said on Friday.

Heavily indebted Lebanon must decide whether to repay a $1.2 billion Eurobond due on March 9 amid a deep financial crisis and dollar crunch that has led to strict capital controls and raised concerns about a default among investors. "In terms of the Eurobond maturities, we are continuing to study the options available in front of us and we have not yet taken any decision on this," said Najd.

"The coming week will be critical in terms of the decision before the March maturity date." A government source said on Thursday that Lebanon would seek a seven-day grace period ahead of the March 9 maturity, a move financial sources said made it more likely the government would look to restructure the March bond.

Beirut this week appointed U.S. investment bank Lazard and law firm Cleary Gottlieb Steen & Hamilton LLP as its financial and legal advisers on the widely expected debt restructuring. Najd said Prime Minister Hassan Diab, whose Hezbollah-backed government won a vote of confidence in parliament this month, would look to make his first trip to an Arab state during the second half of March, without specifying what country.

Lebanon has so far failed to win financial support from Western and Gulf Arab states who have made any help conditional on Beirut enacting economic reforms.

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