Regulatory Alerts2015-10-26 | 12116Debt Restructuring
The Central Bank of Lebanon issued Fundamental Decision No. 12116 to establish a comprehensive framework for restructuring debts of distressed natural and legal persons. The regulation mandates that at least two-thirds of creditor institutions holding 60% of total debt must agree, designates a lead manager to oversee negotiations and repayment programs, and provides mechanisms for waiving or settling debts through cash flow analysis, collateral protection, and off-balance sheet accounting. Furthermore, it authorizes the upgrade of debt classifications to "watch and settlement," permits new financing for economic revitalization, and grants supervisory commissioners authority to monitor compliance and report breaches directly to the Governor.