Sri Lanka To Meet ISB Holders For Talks

COLOMBO (News 1st); Sri Lankan officials are to meet with the International Sovereign Bond Holders Committee on Wednesday, 27th March, in London, UK.

According to reports, they are to further negotiate the debt restructuring program.

Accordingly, Central Bank of Sri Lanka (CBSL) Governor, Dr. Nandalal Weerasinghe and Treasury Secretary, K. M. Mahinda Siriwardana, will represent Sri Lanka.

In addition, representatives from heavyweight financial and legal advisers Lazard and Clifford Chance will attend the meetings, reports said.

Additionally, financial advisers to Sri Lanka’s debt restructuring process Lazard and legal adviser Clifford Chance would be present as parties to observations.

Laat week, Bloomberg reported that global investors and Sri Lanka officials expect to start negotiations aimed at restructuring $12 billion in defaulted global bonds this week.

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, reported Bloomberg.

The goal is to reach a deal quickly, particularly as Sri Lanka is scheduled to hold presidential elections later this year.

The International Monetary Fund (IMF) expressed cautious optimism about Sri Lanka's debt restructuring efforts, highlighting agreements reached with key creditors.

However, the IMF urged Sri Lankan authorities to expedite the finalization of these agreements for a swifter path towards debt sustainability.

"Sri Lanka’s Agreements in principle with the Official Creditor Committee and Export-Import Bank of China on debt treatments consistent with program parameters were important milestones putting Sri Lanka’s debt on the path towards sustainability," stated Peter Breuer, IMF Senior Mission Chief. "The critical next steps are to finalize the agreements with the official creditors and reach Agreements in Principle with the main external private creditors in line with program parameters in a timely manner. This should help restore Sri Lanka’s debt sustainability over the medium term."

The Hindu also reported last week that, Sri Lanka is on the verge of finalizing a debt treatment plan in collaboration with India and the Paris Club.

The proposed plan is expected to include a moratorium of up to six years and a reduced interest rate during the repayment period.

The Colombo-based source, speaking to The Hindu, emphasized the negotiations have reached an advanced stage, and formal agreement terms are anticipated imminently.

As many as 17 countries that have extended loans to Sri Lanka formed the Committee last year for ease of debt restructuring negotiations.

Notably, China has chosen not to participate directly in the OCC platform but has been attending meetings as an observer.

Meanwhile, Colombo has consistently assured the OCC that it will engage in negotiations for the repayment of Chinese loans on terms comparable to those agreed upon with other creditors, reported The Hindu.