February 19, 2020 / 5:37 PM / in a month

Lebanon's March bonds savaged in worst day on record

LONDON, Feb 19 (Reuters) - Lebanon’s dollar-denominated bonds maturing next month plunged 17 cents on the dollar on Wednesday in their worst day on record, as worries of a possible default were compounded by a report the government was probing trading activity.

As heavily-indebted Lebanon battles its worst ever financial crisis, the government is under growing pressure to decide what to do about its repayments, including a $1.2 billion Eurobond due on March 9.

That bond bore the brunt of the selling, dropping to 55 cents and sending its yield effectively soaring above 1,500%.

Other bonds fell heavily too, with most other 2020 and 2021 bonds down between 7 and 9 cents and longer-dated bonds losing at least 3 cents.

Lebanese Parliament Speaker Nabih Berri had said earlier that a debt restructuring was the best solution for looming Eurobond maturities, while the banking association said foreign investors had shown a readiness to negotiate.

A report by news agency Bloomberg also said Lebanon’s government was said to be investigating the sale of bonds by local banks to foreign investors including Ashmore Group which holds blocking stakes in some of the shortest-term bonds.

Reporting by Marc Jones

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