Moody's affirms Lebanon's C rating, changes outlook to stable
Leading international ratings agency Moody's has affirmed the Government of Lebanon's issuer rating at C and has changed the outlook to stable from no outlook.
The C rating reflects Moody's assessment that the losses incurred by bondholders through Lebanon's ongoing default since 16 March 2020 are likely to exceed 65%.
The country is steeped in an economic, financial and social crisis, which its very weak institutions and governance strength appear unable to address. The collapse of the currency in the parallel market and the concomitant surge in inflation fuel a highly unstable environment.
“In the absence of key steps toward plausible economic and fiscal policy reform, official external funding support to accompany a government debt restructuring is unlikely to be forthcoming in the near term,” Moody’s said.
“The stable outlook reflects Moody's expectation that the rating will remain C for the foreseeable future, given the very high likelihood of significant losses for private creditors and Moody's expectation of a very unstable economic environment persisting as a result of recurrent political deadlock and weak institutions,” Moody’s added.
“Lebanon's exposure to a further intensification of the Israel-Hamas conflict partially reverses recent gains in the tourism industry and further undermines economic activity,” it warned.
Source: Naharnet
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