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Moody's downgrades Lebanon's credit rating; outlook 'Stable'

Moody's downgrades Lebanon's credit rating; outlook 'Stable'
Government debt restructuring is becoming inevitable

Mubasher: Moody's Investors Service has downgraded the Lebanese government’s issuer rating to Ca from Caa2, changing the outlook to stable.

The Ca rating reflects the expectation that domestic and external private creditors are likely to suffer substantial losses as the near-term government debt restructuring is becoming inevitable in light of rapidly deteriorating economic and financial conditions in Lebanon, Moody’s commented.

Moody's also downgraded Lebanon's senior unsecured medium-term note programme rating to (P)Ca from (P)Caa2, and affirmed the other short-term rating at (P)NP.

The rating agency lowered the Arab country’s long-term foreign-currency bond and deposit ceilings to Ca from Caa1 and Caa3, respectively.

“The stable outlook balances Moody's assumption so far that a debt restructuring may happen in coordination with creditors and under the umbrella of an economic adjustment program agreed with the IMF that unlocks external funding,” Moody’s said.

Moreover, the long-term local-currency bond and deposit ceilings were downgraded to Caa1 from B2.