Fitch Ratings, the global credit rating agency, has taken significant actions on Lebanon’s credit ratings in response to the country’s ongoing debt crisis.
The Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) has been affirmed at ‘Restricted Default’ (RD), indicating that Lebanon is still in a state of default on its foreign-currency government debt.
This decision comes after the country failed to meet its obligation to pay the principal on the Eurobond that matured on 9 March 2020.
As a result, the Lebanese government has ceased servicing its outstanding Eurobonds as it undergoes a debt restructuring process.
Additionally, Fitch has downgraded Lebanon’s Long-Term Local-Currency (LTLC) IDR to ‘RD’ from ‘CC’, and the Short-Term Local-Currency (STLC) IDR to ‘RD’ from ‘C’.
The downgrade signals that the country is facing significant challenges in meeting its debt obligations and indicates a heightened risk of default on its local-currency debt.
Notably, Fitch typically does not assign Outlooks to sovereigns with ratings of ‘CCC+’ or below, further highlighting the severity of Lebanon’s economic and financial predicament.
The country’s debt crisis remains a pressing concern, and its path to economic recovery and debt sustainability remains uncertain.
