Sri Lanka’s government officials from the finance ministry and the central bank held its first in-person meeting with the country’s largest sovereign overseas bondholders in Washington foreign news agency reports revealed.
The gathering on the sideline of the International Monetary Fund and World Bank annual meetings convened amid debt restructuring talks for $13 billion. Some private creditors also joined the meeting virtually, the sources said.
Amundi Asset Management, BlackRock, HBK Capital Management, and T. Rowe Price Associates Inc are among members of the creditor group’s steering committee.
The move comes after the island nation of 22 million fell into default after a 30-day grace period on a $78 million coupon payment expired earlier this year.
The government did not provide any proposal on how a debt restructuring would look, said two of the people, who asked not to be named because the talks are private.
“It was a good exchange, but we are still at an early stage,” one source said, adding that creditors urged the government to provide information in real time on the country’s debt-sustainability analysis.
Central Bank Governor Nandalal Weerasinghe and Treasury Secretary Mahinda Siriwardena led the meeting from the government side, along with representatives of financial and legal advisers Lazard and Clifford Chance, the sources said.
Sri Lanka, which is struggling with its worst economic crisis in more than seven decades, reached a staff-level agreement with the IMF for a $2.9 billion loan in September, contingent on it receiving financing assurances from official creditors.
Economic mismanagement and the hit from the COVID-19 pandemic have left the country battling its worst financial problems since its independence in 1948, and a lack of foreign exchange reserves has stalled imports of essentials including fuel, food and medicines.
The country also needs to renegotiate debt with bilateral creditors such as China, Japan and India. The Paris Club creditor nations last month reached out to China and India seeking to coordinate closely on Sri Lanka’s debt talks, but is still awaiting a reply.
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