Sri Lanka bondholders said to eye GDP-linked debt restructuring- Bloomberg

Sri Lanka’s private creditors are considering a proposal to swap defaulted bonds with new securities that would have cash flow linked to the nation’s future growth, a news report by Bloomberg said.

Under the plan, the security being mulled by Sri Lanka’s bondholders will pay less if growth falls to levels projected by the International Monetary Fund (IMF), Bloomberg reported quoting unnamed sources.

The creditors view the multilateral fund’s economic forecast of about 3 percent for the next few years as pessimistic, the sources said.

Sri Lanka wants to start talks with private creditors as fast as possible after the IMF approval is won, Finance State Minister Shehan Semasinghe said.