Mubasher: Bank of America Merrill Lynch assigned a “Marketweight” recommendation to Lebanon’s EXD, according to a recent report.
“We do not expect the average credit rating to drop below B-. Eurobonds are tightly held by domestic banks and, as such, they have generally enjoyed defensive and low-beta status,” the report said.
It highlighted that the external debt of Lebanon has been lowered. Banque de Liban (BdL) gross FX reserves have grown but retreated in quality.
“Downside risks include a marked deterioration in regional and domestic political tensions, a widening in fiscal and external balances if oil prices rebound sustainably, and non-resident deposits weakening,” according to the report.
