IMF ready to support discussions with bondholders

REUTERS: The International Monetary Fund (IMF) stands ready to support Sri Lanka’s discussions with international bondholders and will provide a formal assessment after the parties reach a tentative agreement-in-principle, an IMF spokesperson said yesterday.

“We hope an agreement consistent with the parameters of the IMF-supported programme and official creditors’ Comparability of Treatment requirements can be reached soon, ahead of completing the second review under the programme,” the spokesperson said.

Sri Lanka said it failed to reach an agreement with bondholders to restructure about US$ 12 billion debt earlier this week, raising concerns there could be a delay in the island nation receiving a third tranche of its US$ 2.9 billion IMF programme in June. The government said one of the main stumbling blocks had been that the “baseline parameters” of the bondholders’ plan had not matched those embedded in its IMF programme.
“We encourage both parties to continue their discussions swiftly,” the IMF statement added.

Sri Lanka will consult with the IMF to assess if the latest proposals discussed with bondholders were within the parameters of its bailout programme.