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Sri Lanka Seeks Dealer Managers for International Bond Restructuring

The Finance Ministry of Sri Lanka announced on Thursday that it has invited proposals from dealer managers to assist in the restructuring of approximately $12 billion worth of international bonds. This move signals the island nation’s progress towards finalizing its debt restructuring efforts.

Sri Lanka defaulted on its foreign debt in May 2022 amid its most severe financial crisis in decades, marked by a significant shortage of foreign currency reserves. The government is anticipated to commence formal restructuring discussions with bondholders this week.

The notice posted on the Finance Ministry’s website stated, “In the context of the restructuring of its International Sovereign Bonds (ISBs), the Government of Sri Lanka is working towards launching an invitation to exchange its existing ISBs denominated in United States Dollars for new ISBs in the same currency.”

Typically, an exchange proposal, which involves an issuer repurchasing its outstanding bonds in exchange for new bonds with adjusted terms as part of a debt restructuring, is initiated following a preliminary agreement between the debtor and a core group of bondholders.

Interested parties are required to submit their proposals by April 10th.

Source: Reuters

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