September 20, Colombo (LNW): Sri Lanka has announced agreements in principle for restructuring $17.5 billion of its external commercial debt as of the end of 2023. The agreements were made with holders of its International Sovereign Bonds following negotiations with the Ad Hoc Group of Bondholders (AHGB) and the Local Consortium of Sri Lanka (LCSL), which collectively hold over 50% of the bonds.
The agreements entail a present value concession of 40.3% in the baseline scenario, using a discount rate of 11%. This offers Sri Lanka enhanced debt relief compared to the Joint Working Framework agreed in July 2024, including additional reductions in interest payments.
Sri Lanka has also reached an agreement in principle with China Development Bank (CDB) on restructuring approximately $3.3 billion of sovereign debt. Combined with previous agreements with Eximbank of China and members of the Official Creditor Committee (OCC), the country will secure over $17 billion in debt service relief during the IMF program period. This includes around $2.4 billion from Eximbank of China, $2.9 billion from the OCC, $2.5 billion from CDB, and $9.5 billion from bondholders.
