Sri Lanka Bondholders’ Proposal Sees Government Pushback
- Authorities have concerns about proposed “macro-linked bonds”
- Bonds have gained since investors submitted proposal
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Sri Lanka is taking an unfavorable view toward a proposal by foreign dollar bondholders for restructuring its debt, signaling possible complications in negotiations that are key for accessing further funding to support its economic recovery.
“This proposal has not received a favorable response from Sri Lanka,” the Ministry of Finance said in an official statement, referring to a suggested plan released by the bondholder group last week. The proposal included a 20% haircut and new macro-linked bonds which would adjust payout depending on macroeconomic outcomes.