The Cabinet of Ministers has approved the proposal presented by the President, as Minister of Finance, for restructuring international sovereign bonds to restore sovereign debt sustainability.
Accordingly, Sri Lanka has approved the exchange of new bonds for defaulted sovereign bonds.
“The Cabinet has approved the proposal to issue new bonds in place of the old ones,” Deputy Minister of Economic Development Anil Jayantha said addressing the Cabinet media briefing today.
The decision has been taken after an analysis by the Sri Lankan government’s financial advisors on the impact on the Sri Lankan economy and the composition of Sri Lanka’s international sovereign debt, investors and settlements.
The decision is also based on the provisions under the International Monetary Fund’s Comprehensive Credit facility and according to the parameters shown by the debt sustainability analysis carried out by the Fund.
The Government of Sri Lanka reached a final consensus on restructuring debt by the Official Creditor Committee (OCC) of major bilateral creditors in June 2024.
In September 2024, an initial agreement was reached with the international bondholders on restructuring the sovereign debt of US$ 14.2 billion after a compromise discussion with the Adhoc bondholders, a group of representatives of international investors, and the Local Consortium of Sri Lanka. (Islandnews)
