January 12, 2020 / 2:18 PM / 5 days ago

Lebanon central bank wants investors in March Eurobond to swap to longer-term debt -Bloomberg

Jan 12 (Reuters) - Lebanon’s central bank wants domestic holders of a $1.2 billion Eurobond that matures in March to swap to longer-term notes, Bloomberg reported on Sunday, as the country seeks to contain a debt crisis.

"We are making pre-emptive proposals that are voluntary," Bloomberg quoted central bank governor Riad Salameh as saying in an interview bloom.bg/2NkgylU.

“We haven’t taken any decision yet because we don’t have a government,” Salameh said, adding that the central bank wants the proposals to be dependent on the consent of Lebanese banks.

Lebanon’s Treasury should move domestic holders of the Eurobond maturing in March into longer-dated instruments at higher rates, Salameh said.

Salameh also said the bank had not yet decided whether to extend a bridge loan to the Lebanese government so that it can pay all of its Eurobonds due this year.

Lebanon is facing the worst economic crisis since its 1975-90 civil war, rooted in decades of bad governance that has landed the country with one of the world’s heaviest public debt burdens.

Salameh said the country’s foreign reserves are still at “acceptable and comfortable” levels.

The central bank will accept a government request to waive interest payments on Treasury bills this year, he said.

Separately on Sunday, Salameh said that Lebanon’s central bank is seeking extra powers, to regulate and standardise controls which commercial banks are imposing on depositors. (Reporting by Kanishka Singh in Bengaluru; Editing by Susan Fenton)

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