11 May 2024 12:00 am Views - 184
By Kelum Bandara
The private creditors of international sovereign bondholders who account for Sri Lanka’s US $ 12 billion weigh whether a debt restructuring deal should be struck before or after the election, an informed source said.
The country has made progress in restructuring debts with bilateral creditors. However, the process is at risk with bondholders, as the government rejected international bondholders’ proposal to restructure more than $12 billion in debt.
According to the source, the representatives of the bondholders who met with the political representatives here have raised concerns over debt restructuring in the midst of political uncertainty in Sri Lanka ahead of the presidential elections. They are concerned whether any agreement reached at this moment will be honoured in the event of a regime change at the election.
An agreement in principle with bondholders was also needed to secure IMF Board approval for the next $337 million instalment of its $2.9 billion programme.