S&P Global Ratings has upgraded its long-term local currency sovereign credit rating for Lebanon from ‘CC’ to ‘CCC’, with a stable outlook. This marks the first upgrade for Lebanon’s debt.
The upgrade is due to several factors:
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The Lebanese government has improved its ability to pay its local currency debt, partly because it has a fiscal surplus and has resumed paying interest to its central bank.
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A new government formed in February 2025 has started passing key laws that are required for an International Monetary Fund (IMF) program. These laws, including the Banking Secrecy Law and the Bank Restructuring Law, are crucial for a long-awaited debt restructuring.
Despite this progress, significant challenges remain. Lebanon is still in default on most of its debt, including its Eurobonds. It also hasn’t passed a key Financial Gap Law needed to address banking sector losses and repay depositors. The country also faces ongoing risks from weak institutions, limited access to international financing, and geopolitical tensions.
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