Debt Restructuring 'Totally Out of the Question', Says Khalil after Baabda Financial Talks

The issue of restructuring Lebanon’s public debt is not on the table and is “totally out of the question,” caretaker Finance Minister Ali Hassan Khalil reiterated on Sunday after senior-level talks at the Baabda Palace.

He was speaking after a financial meeting presided over by President Michel Aoun and attended by Prime Minister-designate Saad Hariri, caretaker Economy Minister Raed Khoury, the head of the parliamentary finance committee MP Ibrahim Kanaan, Central Bank Governor Riad Salameh and the head of the Association of Banks in Lebanon, Joseph Torbey.

“The Lebanese state is committed to preserving the rights of depositors, banks and the holders of the various Lebanese sovereign debt bonds. What is currently on the table is the implementation of the reforms promised by the 2018 budget as well as the Lebanese state’s pledges at the CEDRE conference,” Khalil added.

Khalil had stressed Friday that there was “absolutely no intention of touching the value of Lebanese bonds.”

“The proposals are an operation to organize and manage the debt and to move ahead with reform measures that reduce the burden of it,” he clarified, after a media report caused Lebanon’s dollar-denominated sovereign bonds to tumble for a second day.

The media report apparently carried an inaccurate headline that mixed up the words “reschedule” and “restructure.”

Khalil said such a rescheduling would be undertaken in coordination with lenders and the central bank.