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Many bond issues <XS1052421150=TE> <XS0944226637=TE>
<XS1419879769=TE> across the curve fell 3 cents in the dollar,
suffering their heftiest falls and plumbing record lows,
according to Tradeweb data.
Yields on some bonds have soared with the 2020 bond issue
reaching 37%, indicating borrowing costs are prohibitively
expensive for the heavily indebted country.
The sell-off sharply accelerated on Tuesday after two sources
said Lebanon's Prime Minister Saad al-Hariri was likely to step
down later in the day.
An unprecedented wave of protests has swept Lebanon for nearly
two weeks, with thousands of people on the street demanding the
government resign, amid growing anger at political leaders
accused of corruption. The crisis has paralyzed Lebanon, with
schools and some businesses remaining shuttered. The country's
banks have been closed for 10 days.
"It is difficult to see this (government resignation) as a
positive," said Brett Diment, head of global emerging market
debt at Aberdeen Standard Investments, adding there was no
clarity as to what an alternative government could look like.
"It's a very a challenging situation and Lebanon has high bills
to pay and it's going to be difficult for it get through the
current situation without meaningful economic reforms."
Some issues such as the 2020 <XS0944226637=TE> or 2029
<XS1419879769=TE> have lost 10 cents in the dollar since the
start of the protests in mid-October.
On Monday, Lebanon's central bank governor warned that a
solution to the crisis must be found in days to restore
confidence and avoid any future economic collapse.
(Reporting by Karin Strohecker and Tom Arnold, editing by Mike
Dolan and Steve Orlofsky)
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