Acknowledges those who were involved in it at leadership level

Says all our ‘collective efforts’ are now paying off

By Sanath Nanayakkare

On 19 the September 2024, Sri Lanka reached agreement in principle with each of the Ad Hoc Group of Bondholders, the Local Consortium of Sri Lanka and China Development Bank on bond restructuring terms.

On 25 November, Sri Lanka launched an official Invitation to holders of its ISBs to exchange their bonds against new debt instruments, pursuant to the above agreement with two representative groups of holders – one comprising international investors and the other domestic financial institutions – together holding approximately 50% of the total outstanding amount of ISBs.

On 13th December 2024, the Finance Ministry announced that the expiration of its Consent Solicitation and Exchange Offer related to its International Sovereign Bonds (ISBs), with preliminary results indicated a very high participation from market participants.

At the expiration of the offer period, the Finance Ministry said Sri Lanka was very pleased to report an extremely high level of participation across all series, which is expected to result in the exchange of close to 98% of the total outstanding amount of ISBs for new securities.

It quoted President and Finance Minister Anura Kumara Dissanayake, as saying: “We are very pleased to see this vote of confidence from our international and local bondholders. The past few years have been very challenging for the Sri Lankan population, but all of our collective efforts are now paying off. The implementation of this debt exchange, which is the result of two years of intense negotiations, will deliver substantial debt relief for Sri Lanka, freeing up resources in the short and medium term to finance our development and social agenda, while restoring the long term sustainability of our public finances.”

“We are committed to using this debt relief and fiscal space to ensure robust macroeconomic fundamentals and economic growth that will enable Sri Lanka to meet future debt service obligations and overall economic objectives. This successful bond exchange will also allow us to normalise our relations with bondholders and other key external partners,” Dissanayake added.

The President expressed appreciation to all stakeholders who supported through this complex process, including our official sector and commercial creditors, the co-chairs and secretariat of the Official Creditor Committee, the International Monetary Fund, and others with whom Sri Lanka worked in good faith to enable this positive outcome.

He also thanked those who were involved in this journey by providing leadership and numerous contributions at critical stages, enabling Sri Lanka to achieve this important milestone in her journey towards economic recovery.

“Today we open a new chapter of our history and turn the page following multiple years of crisis,” the President added.

Final results are expected to be available on 16th December (today). The settlement of the bond exchange is intended to take place on 20th December.