Exclusive-Sri Lanka’s bondholders send debt rework proposal to government, sources say

Rosario and Rodrigo Campos are written by Jorgelina.

Three sources with first-hand knowledge of the situation claim that a committee of Sri Lanka’s’s international private creditors sent the government its first debt rework proposal regarding more than$ 12 billion in outstanding bonds.

After the island kingdom of 22 million persons defaulted on its debt a year ago, this is the first creditor plan. One of the men, who asked not to be named because conversations are personal, said that it represents a very formal part to join with the nation’s’s government.

The proposal’s’s specifics were not promptly available.

A request for comment was never answered by public members. A bank commission spokesperson declined to comment.

The collection of about 30 debts includes T. Rowe Price Associates, Amundi Asset Management, BlackRock, and HBK Capital Management.

According to two places, lenders and government representatives met this week in Washington with legal and financial advisors from both sides.

Separately, the Paris Club of Creditor Governments announced on Friday that it intends to begin talks to rebuild Sri Lanka’s’s bilateral debt following the formation of a commission by the finance ministers of France, Japan, and India, as well as representatives of the country.

Despite the fact that China, Sri Lanka’s’s largest bilateral creditor, holds the key to resolving some low – and middle-income countries’ debt problems, it chose not to participate in the announcement.

When asked if China could join a Japan-initiated common platform to coordinate the restructuring of Sri Lanka’s’s debt during the International Monetary Fund and World Bank spring meetings in Washington, P.S. Bank of China Governor Yi Gang responded,” I think we can solve the problem.

Sri Lanka experienced its worst fiscal crises in more than seven years following the COVID-19 crisis, which destroyed the tourism industry, an increase in import prices after the start of the war in Ukraine, and economic mismanagement.

To reduce its enormous debt load, the nation obtained a$ 2.9 billion program from the IMF last month.

( Editors Sandra Maler, Leslie Adler, and Paul Simao, as well as Jorgelina do Rosario and Rodrigo Campos and Leika Kihara do the reporting. )

This week has been filled with significant stories in the U.S. and elsewhere. OAN NewsroomUPDATED 7: 19 Do – Saturday, April 15, 2023.

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