Exclusive-Sri Lanka's bondholders send debt rework proposal to government, sources say
Reuters
Published Apr 14, 2023 07:20PM ET
Updated Apr 15, 2023 04:10PM ET
By Jorgelina do Rosario and Rodrigo Campos
WASHINGTON (Reuters) -A committee of Sri Lanka's international private creditors sent its first debt rework proposal to the country's authorities regarding more than $12 billion in bonds outstanding, according to three sources with direct knowledge of the matter.
It is the first bondholder proposal after the island nation of 22 million people defaulted on its debt a year ago. It marks a first formal step to engage with the country's authorities, said one of the people, who asked not to be named because discussions are private.
Details of the proposal were not immediately available.
Representatives for the government did not respond to a request for comment. A spokesperson representing the creditor committee declined to comment.
The group of about 30 creditors includes global investment companies Amundi Asset Management, BlackRock (NYSE:BLK), HBK Capital Management and T. Rowe Price Associates.
Bondholders and government officials met in Washington this week, with legal and financial advisers for both sides present, two sources said.
Separately, the Paris Club of creditor governments said on Friday it aims to start negotiations to restructure Sri Lanka's bilateral debt after a committee was set up by French, Japanese and Indian finance ministers, and representatives of Sri Lanka.
China, Sri Lanka's biggest bilateral creditor, did not join the announcement even though it holds the key to solving debt woes for some low- and middle-income countries.
"If we can cooperate, if we can equally and fairly share the burden, I think we can solve the problem," People's Bank of China Governor Yi Gang said in a seminar during the International Monetary Fund and World Bank spring meetings in Washington, when asked whether China could join a Japan-initiated common platform to coordinate restructuring of Sri Lanka's debt.
After the COVID-19 pandemic that ruined the tourist sector, a spike in prices of imports following the start of the war in Ukraine, and economic mismanagement, Sri Lanka fell into its worst financial crisis in more than seven decades.
The country secured last month a $2.9 billion program from the IMF to tackle its huge debt burden.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.