Sri Lanka Stumbles Toward Its First Default on Foreign Debt
- Grace period expires May 18 for missed dollar bond coupons
- Many of Sri Lanka’s bonds have so-called cross-default clauses
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Sri Lanka is sliding inexorably into default as the grace period on two unpaid foreign bonds nears an end, the latest blow to a country rattled by economic pain and social unrest.
The island nation could be formally declared in default if it fails to make an interest payment to bondholders before Wednesday, when the 30-day grace period for missed coupons on dollar bonds ends. That would mark its first default.