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To pay or not to pay: The debate over Lebanon's eurobond continues

With the deadline approaching for Lebanon to make a $1.2 billion payment on its eurobond debt amid growing economic and currency crises, the debate over whether to pay has become increasingly heated.
The payment is due March 9, and officials have said they will announce a decision Friday or Saturday. As Al Arabiya English has previously reported, a number of financial experts have pushed for Lebanon not to default, saying that it would ruin the country’s prospects of accessing needed international investment in the future. The country’s banking association initially urged for the bond to be repaid, but they revised their stance and asked for a bond swap, rather than default.
On the other side, a number of economists and activists have argued that to make the payment now – particularly if a future debt restructuring is likely – would divert scarce dollars from meeting the population’s most basic needs.
Importers, which have to pay their suppliers in foreign currency, have struggled to get access to dollars at the official rate of 1,500 Lebanese lira to the dollar or have been forced to buy them at the inflated black market rate, which is now around 2,500 lira to the dollar.
"We know that there’s a very limited supply of dollars left
Given the likelihood of a debt restructuring in the future, Akkaoui said, “If we chose to use the central bank’s reserves this time and do a bond swap, it’s kicking the can one more time…Even if the government decided to pay right now, unless there's a huge change of wind that yields a big fiscal surplus in dollars and a balance of payments surplus, we're going to restructure at some point."
He added, "What Lebanon needs right now is a multi-phased plan with multiple pillars within it. It needs to be fiscal, monetary, financial, and macroeconomic."
Others have argued that foreign creditors should not be the priority when Lebanese depositors are not allowed access to their own money. Former Labor Minister Camille Abousleiman, an attorney who worked on the legal framework for Lebanon’s bonds, is among them, and he has advocated for the country to restructure its bonds and seek an IMF bailout.
“It is not permissible to pay foreigners while you are forcing the Lebanese to wait in front of the banks to obtain a hundred or two hundred dollars,” Abousleiman has said.
Nothing to lose
Jad Chaaban, an associate professor of economics at the American University of Beirut agreed, saying it is “unethical” to use the country’s dollar reserves to pay foreign creditors under the present circumstances.
As to the counterarguments that defaulting would ruin Lebanon’s reputation, making future borrowing more difficult and expensive, and might embroil the country in costly lawsuits, Chaaban said, “Our reputation is already very bad and our debt is very expensive, so you don’t have anything to lose, basically.”
Some officials have floated the idea of asking Lebanese banks to buy back bonds that they had sold to foreign investors, which would ease the path to restructuring. Chaaban said he thought that could offer a viable option.
“I frankly think if some of the holders start accepting, the rest would accept, because it’s a small fraction of the funds they have – especially the foreign ones, and I don’t think, frankly, that they are willing to pay lawsuits on such small amounts compared to the other funds they have,” he said.
Another contentious issue that will need to be addressed, whether Lebanon makes the payment or not, is whether the country will seek an IMF bailout. While some have argued that there is no alternative, many are wary of the potential austerity measures that would be imposed, and Hezbollah, which is a key part of the coalition that appointed the current government, has opposed the idea.
No good options
Paul Sukkar, an economist and activist, said he opposes both the IMF bailout and any bond payment, particularly of interest, which he described as “depleting our reserves to pay a debt that we’re going to restructure at the end of the day.”
But he acknowledged that whatever path the government chooses will entail economic difficulties and more tough choices.
“The best of both options is bad,” he said. “Now we’re at a stage of total economic collapse, so we’re dealing with bad and worse.”
source: Abby Sewell
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BENEFIT AGM approves 10%...
- March 27, 2025
BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).
Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.
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