Sri Lanka and international sovereign bondholders are set to resume discussions on unresolved issues following inconclusive talks held in March, as reported by a top aide to President Wickremesinghe.
During the previous negotiations in London, both parties had addressed four key points concerning the restructuring of sovereign bonds, successfully reaching consensus on two. However, a restructuring proposal put forth by bondholders did not align with International Monetary Fund (IMF) requirements, prompting Sri Lanka to present a counter proposal.
President’s Chief of Staff Sagala Ratnayake emphasized that the upcoming discussions would center on these outstanding matters. Sri Lankan officials remain optimistic about reaching an agreement with bondholders before June.
Notably, bondholders have expressed interest in linking a bond to the country's dollar gross domestic product, citing concerns over conservative IMF growth projections.
Previous restructuring initiatives included value recovery instruments, such as warrants, tied to economic performance indicators like oil prices. Initially, bondholders proposed a bond with a lower haircut, contingent upon GDP growth meeting IMF projections of 3.1 percent.
