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Lebanon to ask for week-long grace period for March 9 bond: Source

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A man inspects the shattered window of a bank in the coastal city of Tripoli, to the north of the Lebanese capital, Beirut, on January 22, 2020. (Photo by AFP)

Lebanon reportedly plans to ask for a week-long grace period for a 1.2-billion-dollar Eurobond that is due on March 9, in an attempt to give financial advisors more time to come up with a restructuring plan.

The Arab country intends to seek the seven-day grace period ahead of the maturity date, Reuters reported, citing an unnamed government source on Thursday.

On Tuesday, the newly-formed Lebanese government appointed asset management company Lazard as its financial advisor to help restructure the country’s debts, and law firm Cleary Gottlieb Steen & Hamilton LLP as its legal adviser.

Lazard, whose principal executive offices are in New York City, Paris, and London, claims that it is the world’s leading financial advisory and asset management company, which advises on mergers, acquisitions, restructuring, and capital structure and strategy.

Earlier, Beirut had invited several international firms to bid to be its financial adviser on how to restructure and clear the country’s sovereign debt. And a team of experts from the International Monetary Fund (IMF) traveled to Lebanon and met with new Lebanese Prime Minister Hassan Diab last week.

The Lebanese Hezbollah resistance movement, whose party in parliament is one of the main backers of the new government, has opposed allowing the IMF to manage Lebanon’s financial crisis.

On October 29, the then-Prime Minister Saad Hariri resigned under pressure from the unprecedented protests, creating a political void that lasted until January 21, when Diab assumed office as the country’s new premier.

Diab faces one of the worst crises in his county’s recent history and urgent decisions about upcoming debt payments, particularly a 1.2-billion-dollar sovereign bond due early next month.

Lebanon’s national debt stands at around 85 billion dollars.

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