Lebanon’s mounting debt problems, Egypt’s gas boom

Lebanon’s dire finances have come back under the spotlight and we continue to think that some form of debt restructuring is more likely than not. Argentina’s experience in the past couple of weeks suggests that the spreads of Lebanese sovereign debt would widen much further if default risks begin to crystallise. In Egypt, news this week that production at the Zohr gas field is ahead of schedule strengthens our view that risks from the country’s current account deficit are limited.