Talks with bondholders to kickoff next week

Sri Lankan officials and global investors will kick off negotiations on restructuring US$ 12 billion in defaulted global bonds next week, Bloomberg News reported.

A group of bondholders, known as a steering committee, will begin talks as they weigh a proposal from the government to rework the overseas debt that has been in default since 2022, people said, asking not to be named because negotiations are private, a news report by Bloomberg said.

Sources shared with the news agency that the goal is to reach a deal quickly, particularly as Sri Lanka is scheduled to hold presidential elections later this year.
The nation’s dollar bonds jumped across the yield curve. The notes due in 2027, 2029 and 2030 each climbed more than 1.8 cents on the dollar, making them the best performing hard-currency bonds across emerging-markets, trading at the highest since 2021.

Last month, Sri Lanka sent a proposal to holders of dollar bonds as part of its plan to overhaul US$ 27 billion of foreign debt, including bonds and loans. The restructuring is essential to ensure financing from the IMF bailout keeps flowing.