23 December 2024 01:50 am Views - 173
As Sri Lanka brought the bond restructuring to a close, the Central Bank issued eight new treasury bonds with maturities running up to 19 years for which valid offers were accepted under the local bonds option by the government in return for the defaulted sovereign bonds.
Each bond has a value of Rs.19,466.1 million, bringing to Rs. 155.73 billion in total and carries a variable coupon linked to the Central Bank’s Standing Lending Facility Rate (SLFR) plus 50 basis points.
The coupon benchmarked to the SLFR is calculated based on the 6-month historical average of the Standing Lending Facility Rate as published by the Central Bank and as calculated on the date which is 30 days before the relevant interest payment date for such local LKR bonds.
Although the Central Bank last month abandoned SLFR and the Standing Deposit Facility Rates as the key policy rates, the Central Bank will continue to calculate and publish the two rates.
Local bond holders, majority of whom consist of banks, consented to take receipt of 30 percent of the value of defaulted bonds in Sri Lankan rupee denominated bonds, the consent solicitation called from November 25 through December 12 showed a 98 percent average participation rate.
Consent was called based on the agreement in principle reached in mid-September where the bond holders were given the option to receive 70 percent of their defaulted bonds in new dollar bonds with a 10 percent haircut and the balance to receive in rupee bonds sans a haircut.
Foreign bond holders could also opt for the local bond option up to a ceiling.
These bonds will have linear semi-annual amortisation with first amortisation in 2036 and final maturity in 2043.
With the issuance of these eight rupee bonds, Sri Lanka has successfully restructured US$ 12.55 billion in sovereign bonds in default.
In restructuring, the authorities converted 11 international sovereign bonds and accumulated past due interest bond into a mix of four macro-linked bonds, one governance-linked bond and one past due interest bond.