How to Restructure Lebanon's Debt

11 Pages Posted: 7 May 2020 Last revised: 11 May 2020

See all articles by Adriana Bartolo

Adriana Bartolo

New York University (NYU) School of Law

Lukasz Swiderski

New York University (NYU), School of Law, Students

Date Written: May 05, 2020


To restructure its debt, the Republic of Lebanon should conduct an exchange offer that transfers existing bonds into the hands of a fiduciary agent that is contractually bound to block any attempts to accelerate the debt by non-participating creditors. The exchange offer should also solicit consent to modify the forum selection clause in the old bonds, making Lebanon the exclusive forum for adjudicating disputes. Simultaneously, the Republic should clarify a crucial inconsistency in the Republic’s 2010 Fiscal Agency Agreement. Under Condition 15(a) of the relevant bonds, modifying non-payment terms like the forum selection provision arguably requires a lower threshold, which the agreement authorizes the Republic to supplement in accordance with prevailing market norms. Finally, the Republic should enact legislation that subordinates bondholders who attempt to challenge this interpretation. Together, these steps would considerably strengthen the Republic’s position with respect to potential holdouts.

Keywords: Sovereign Debt, Sovereign, Restructuring, Cryonic, Lebanon, Lebanese Republic

Suggested Citation

Bartolo, Adriana and Swiderski, Lukasz, How to Restructure Lebanon's Debt (May 05, 2020). Available at SSRN: or

Adriana Bartolo (Contact Author)

New York University (NYU) School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Lukasz Swiderski

New York University (NYU), School of Law, Students ( email )

New York, NY
United States

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