Sri Lanka concludes Sovereign Bond Restructuring

In a statement, Sri Lanka’s Ministry of Finance announced that the restructuring involved an exchange of defaulted International Sovereign Bonds (ISBs) for new securities that were launched on 25th November.

The initiative saw a good participation, with nearly 98% of outstanding ISBs expected to be converted.

President Anura Kumara Dissanayake described the development as a vote of confidence from both international and domestic bondholders.

Sri Lanka had defaulted on its external debt obligations in April 2022 at the peak of the economic crisis. The island nation grappled with a shortage of essentials which was caused due to a forex crisis making it difficult to import several essential commodities.

With generous assistance of 4.5 billion dollars from India, and securing of an IMF financing package of 2.9 billion dollars, the island has made efforts towards recovery.

In addition, the debt restructuring efforts led by the Official Creditor Committee co chaired by India, France and Japan helped the island to finalise debt restructuring with moratorium on debt repayments until 2028 and deferred payments until 2042.