Sri Lanka Bondholders Eye GDP-Linked Debt Restructuring
- Creditors see IMF’s economic growth projection as pessimistic
- Nation expected to win IMF board approval for loan on Monday
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Sri Lanka’s private creditors are considering a proposal to swap defaulted bonds with new securities that would have cash flow linked to the nation’s future growth, according to people familiar with the matter.
Under the plan, the security being mulled by Sri Lanka’s bondholders will pay less if growth falls to levels projected by the International Monetary Fund, the people said, asking not be identified as the discussions are private. Creditors view the multilateral fund’s economic forecast of about 3% for the next few years as pessimistic, the people said.