The conventional wisdom is that Leb won't default on its Eurobonds ($ debt) b/c consequences of being shut out of intl financial markets is too great & the amounts that have be repaid in the near term are manageable. But what if the Govt decided to restructure the Eurobonds?
There are several challenges that the Govt will face b/c of the terms in the EBs themselves. Important to note that the Govt is already effectively defaulting on EBs held by local banks by forcing them to swap them out for new bonds when they come due (instead of paying them off)
Provisions in the EBs will make a restructuring messy & time consuming. First, 75% of the EB holders have to vote affirmatively to a restructuring deal. EB typically have Collective Action Clauses, meaning voting is aggregated across all of the notes together. 
Lebanon's EB for some reason don't have that provision.I haven't heard a good reason why not. Without CACs, the voting is on a series by series basis, so the 75% threshold applies to each individual Eurobond series. That is a higher threshold to meet.
Foreign ownership of EBs is 25%+ in many series (@nafezouk chart below).Its thought that local banks wld be more cooperative w Govt on a restructuring deal.Some foreign owners may be, others not.But any EB series can scuttle a deal even if it represents a small share of total EBs
What's more is BdL owns a chunk of the EB (we don't know which exactly, but likely the earlier maturing ones). Notes owned by BdL are NON-VOTING. That has the effect of INCREASING the voting share of foreign owners in the series in which there is both BdL and foreign ownership.
If Leb defaults on any EB payment or changes the terms of any series,it is in default on ALL the EB. That allows any EB series (by 25% vote) to accelerate, meaning all EBs are due and Govt is screwed. This option is off the table. This is also customary.
Others have noted that the EBs do not allow for disputes to be resolved thru an arbitration panel (rather than a court). Arbitration is faster. Court cases can drag on. NY courts are ok but cases still take time. Time that is not on Lebanon's side, weakening its bargaining power.
You'll notice the Govt waived sovereign immunity&the legal jurisdiction is NY.Both of these are customary.Nobody will lend to a country like Lebanon unless the jurisdiction is NY or England. Waiving sovereign immunity means the Govt can be sued if it breaches its EB obligations.
If the Govt defaults, EB holders will bring a dispute before a NY court to try to enforce a judgement on assets of the state. Assets in Lebanon are immune. Assets abroad aren't. What about BdL's gold&other assets? Well I wrote something about that earlier.
If we discover oil&gas(exploration drilling is starting),that may factor into negotiations. In Mozambique's restructuring,creditors wanted a new loan linked to future gas revenue.Too early to tell for Leb but creditors may consider that future revenue. bloomberg.com/news/articles/…
I wrote on the financing challenges Lebanon will face if it starts any future oil&gas developments.The potential for EB restructuring may have contributed to Govt's decision to WAIVE its right to participate as an investor alongside TOTAL,costing billions.
A EB restructuring will be MESSY & could take many years to sort out, all while Leb is shut out from the international financial markets. An unresolved default could delay oil&gas & other infra investments as no lenders will lend into a defaulted country.But it may be unavoidable
Finally, bc I'm an oil&gas nerd,here's some work I did to show that even under an optimistic scenario, there just isn't likely to be enough oil&gas revenue to make a dent in our huge financial hole, and none of that revenue is likely to come before 2030.
