For the first time, S&P upgrades Lebanon's sovereign debt rating
This is the first time S&P upgrades its assessment of Lebanese sovereign debt, though the move applies only to Treasury bills. The government resumed coupon payments on Treasury bills in 2024 after halting them in 2021.
Budget surpluses and reforms
S&P said the upgrade reflected the government's growing ability to service debt in local currency, supported 'by budget surpluses over the past two years' and some progress on reforms required for a new International Monetary Fund program. The surpluses stem largely from the state's failure to fully restore public sector wages eroded by the lira's devaluation, the suspension of payments on dollar debt since March 2020, and deep cuts to public investment.
On the reform front, Parliament passed a law in April amending banking secrecy rules to meet international standards, followed by a bank resolution law over the summer. Still, Lebanon must do more to persuade the IMF to grant conditional financial assistance.
S&P said major hurdles remain and it does not expect significant progress on debt restructuring before legislative elections in May 2026, five years after Lebanon's eurobond default. The agency added that the fragile cease-fire reached last November between Israel and Hezbollah continues to cloud recovery prospects.
S&P forecasts modest average growth of 2.3 percent in 2025 and 2026. It expects net public debt to fall to 113 percent of GDP by the end of 2025, down from about 240 percent in 2022, helped by improved fiscal performance, exchange rate stabilization and strong nominal GDP growth driven by inflation. The agency also projects that Lebanon's current account deficit will remain large but narrow to an average of 18 percent of GDP in the coming years, from 23 percent in 2023 and 2024.
Lebanon's eurobonds — dollar-denominated debt securities — rose 11 percent last week, closing at 19.75 cents on the dollar Wednesday, their highest level in two years.
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L'Orient-Le Jour
12 hours ago
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For the first time, S&P upgrades Lebanon's sovereign debt rating
Standard & Poor's Global Ratings last week raised Lebanon's long-term credit rating in Lebanese liras from 'CC' to 'CCC,' while keeping a stable outlook and affirming its rating on foreign currency debt (eurobonds) at 'SD,' or selective default. This is the first time S&P upgrades its assessment of Lebanese sovereign debt, though the move applies only to Treasury bills. The government resumed coupon payments on Treasury bills in 2024 after halting them in 2021. Budget surpluses and reforms S&P said the upgrade reflected the government's growing ability to service debt in local currency, supported 'by budget surpluses over the past two years' and some progress on reforms required for a new International Monetary Fund program. The surpluses stem largely from the state's failure to fully restore public sector wages eroded by the lira's devaluation, the suspension of payments on dollar debt since March 2020, and deep cuts to public investment. On the reform front, Parliament passed a law in April amending banking secrecy rules to meet international standards, followed by a bank resolution law over the summer. Still, Lebanon must do more to persuade the IMF to grant conditional financial assistance. S&P said major hurdles remain and it does not expect significant progress on debt restructuring before legislative elections in May 2026, five years after Lebanon's eurobond default. The agency added that the fragile cease-fire reached last November between Israel and Hezbollah continues to cloud recovery prospects. S&P forecasts modest average growth of 2.3 percent in 2025 and 2026. It expects net public debt to fall to 113 percent of GDP by the end of 2025, down from about 240 percent in 2022, helped by improved fiscal performance, exchange rate stabilization and strong nominal GDP growth driven by inflation. The agency also projects that Lebanon's current account deficit will remain large but narrow to an average of 18 percent of GDP in the coming years, from 23 percent in 2023 and 2024. Lebanon's eurobonds — dollar-denominated debt securities — rose 11 percent last week, closing at 19.75 cents on the dollar Wednesday, their highest level in two years.
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S&P upgrades Lebanon's local currency rating to CCC, affirms foreign currency rating at SD
S&P Global Ratings announced an upgrade of Lebanon's long-term local currency rating to CCC with a stable outlook, while affirming its foreign currency rating at SD. Reuters
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Aoun: Lebanon is not 'bankrupt,' but a 'stolen' country
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