Government responds to Ad Hoc Group of Bond holders

The Sri Lankan Government invited the Ad Hoc Group of Bond holders to further engage with the country’s debt advisors under existing non-disclosure agreements to progress the matter in a reasonable and viable way.

The government issued a statement yesterday responding to the Group statement of the Bond Holders dated October 13, 2023 and accompanying debt restructuring proposal relating to Sri Lanka’s outstanding International Bonds.

 The statement said that the authorities of Sri Lanka wish to acknowledge the group’s proposal and added that the proposal has not received a favorable response from Sri Lanka.

It added, the authorities and their advisors intend to take the necessary time to consider proposal and assess its compatibility with the parameters in Sri Lanka’s IMF support programme and comparability of treatment principal, compliance with both of which is an imperative for the authorities.

The authorities have already expressed to the bondholders advisors their serious reservations about the construct of the Macro – Linked bonds proposed by the group.  

The authorities’ belief that the indicative debt restructuring scenario shared with commercial creditor May 2023 provided a robust basis for engagement.

The statement added that the Government has also understood that the group may have diverging views on the GDP and exchange rates trajectories projected as part of the IMF supported program. The authorities are therefore ready to discuss potential value recovery instruments if structured appropriately, taking into account the position of other creditors.