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Restructuring Guru Buchheit Warns Sri Lanka on Holdout Creditors
A clause on some of Sri Lanka’s older dollar bonds gives creditors a potential opening to hold the sovereign hostage and stall restructuring negotiations, Lee Buchheit, a veteran of over two dozen debt restructurings who has also been consulted by the Sri Lankan government, told Bloomberg on Thursday.
He says some of the nation’s debt contracts contain the so-called single series collective action clause, which could allow a minority of bondholders to veto or demand terms in the negotiations.
“One must always anticipate the possibility of holdout creditors in an operation of this kind,” Buchheit said in email replies. “No one seriously doubts that Sri Lanka needs debt relief. The debate may focus on how much debt relief and from whom will it be sought.”
While Sri Lanka is seeking a bailout from the International Monetary Fund, the multilateral lender insists that existing debt must be brought to sustainable levels before any aid is doled out. That could include protracted discussions with not just global asset managers but also large bilateral creditors such as Japan, India and China, each of whom would also impose their conditions.
For instance, India has stated that it wants China to be treated on par with other creditors in the debt restructuring process. However, China has historically preferred to hand out fresh loans as refinance rather than rework existing debt and doesn’t often share details of the credit. Sri Lanka hasn’t been able to tap a $1.5 billion swap line from China over concern that the IMF may consider it as a loan and force delays in repayment.
‘Main Challenge’
“The main challenge I see is one of coordination among the three main creditor groups — bondholders, Paris Club bilaterals and non-Paris Club bilaterals like China and India,” said Buchheit. “A commitment by Sri Lanka to even-handed treatment of these three groups should go a long way toward smoothing the path of the negotiations.”
China has indicated that it will not insist on preferential repayment of loans and is willing to be treated at par with other creditors, Sri Lanka’s President Gotabaya Rajapaksa said in an interview on Monday.When asked if Beijing would be willing to be treated on par with other creditors, Foreign Ministry spokesman Zhao Lijian said on Tuesday that China supports “the proper settlement through consultation with relevant parties and institutions” and hopes other countries will also play a constructive role.
“We hope that Sri Lanka will protect the legitimate rights of foreign investors and safeguard and uphold the credibility and good investment environment at home,” he added.
Sri Lanka is grappling with a worsening humanitarian crisis after it ran out of dollars to import food and fuel, stoking inflation to 40% and forcing a historic debt default. Sri Lanka needs $5 billion to ensure “daily lives are not disrupted,” and a further $1 billion to strengthen the rupee, Prime Minister Ranil Wickremesinghe told Parliament Tuesday.The first step would be a Debt Sustainability Analysis from the IMF, which will provide an outline of how much of a haircut creditors could see. Unlike corporate bankruptcies, debt restructuring has no clear, defined rules.
That’s where Buchheit fits in. The retired lawyer has worked on almost every major sovereign restructuring case in a career that spanned over four decades, including leading the legal team for the $206 billion Greek negotiations in 2012. That restructuring — the world’s biggest — retroactively imposed an “aggregated collective action clause” across domestic notes, which has since become an important tool to ensure that a majority of creditors can force any minority holdouts to accept a restructuring deal.Bonds issued before 2015 are likely to be subject to the problematic single-series CACs as innovations after that year have eliminated more protracted negotiations by requiring only investors who hold three quarters of overall debt to agree, according to Matthew Vogel, London-based portfolio manager and head of sovereign research at FIM Partners.
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Sun directly overhead Pandatharippu, Thellippalai, Varuthaleivilan, Vasavilan, and Manatkaadu about 12:10 noon today (15)
On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka from the 05th to 15th of April in this year.
The nearest areas of Sri Lanka over which the sun is overhead today (15th) are Pandatharippu, Thellippalai, Varuthaleivilan, Vasavilan, and Manatkaadu about 12:10 noon.
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Heat Index at ‘Caution Level’ in the Northern, North-central, North-western, Western, Eastern and Southern provinces and in Monaragala district
Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre
Issued at 3.30 p.m. on 14 April 2026, valid for 15 April 2026.
The Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Northern, North-central, North-western, Western, Eastern and Southern
provinces and in Monaragala district.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.
Effect of the heat index on human body is mentioned in the above table and it is prepared on
the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.
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“I extend my heartfelt wishes to all Sri Lankans for a peaceful and joyous Sinhala and Tamil New Year!” – President
President Anura Kumara Dissanayake, issuing a New Year message, extend his heartfelt wishes to all Sri Lankans for a peaceful and joyous Sinhala and Tamil New Year!
The Sinhala and Tamil New Year, which symbolises the aspiration for renewal both physically and spiritually, is the foremost cultural festival of the people of this country.
During the Sinhala and Tamil New Year, traditional customs are upheld, with priority accorded to rituals and religious observances, and activities undertaken collectively at a common auspicious time. This shared cultural practice vividly reflects our nation’s identity before the world, as well as the strong socio-cultural bonds that exist among our communities.
We firmly believe that the future path of national development can only be shaped in harmony with this invaluable culture and our distinguished historical heritage. Accordingly, it must be recalled that all our future development plans have been formulated upon the firm foundation of these precious traditions and cultural values.
Moreover, the common aspiration embodied in the customs and rituals associated with the solar transition is the nurturing of a compassionate individual who values togetherness, respects others, and lives in harmony with nature. I believe that the virtues and values of unity reflected in these New Year traditions should not be confined to these few days alone, but should instead be demonstrated throughout the year in our daily conduct.
In the face of the most significant recent natural disaster challenge encountered in the past year, we demonstrated to the world our resilience and capacity to withstand internal shocks. At the same time, in responding to the external challenges arising from the conflict in the Middle East, the Government has already set in motion a well-planned and effectively managed programme to overcome these difficulties.
As a nation, in overcoming these challenges together, I call upon all of you to further dedicate yourselves to enriching your lives through the values of togetherness, sharing, and solidarity exemplified during the Sinhala and Tamil New Year season.
As we strengthen the achievements we have secured and move forward with unwavering resolve in the face of emerging challenges, I invite everyone to join hands in unity to realise the vision of “A Thriving Nation – A Beautiful Life” for all.
I extend my heartfelt wishes to all Sri Lankans for a peaceful and joyous Sinhala and Tamil New Year!
Sun directly overhead Pandatharippu, Thellippalai, Varuthaleivilan, Vasavilan, and Manatkaadu about 12:10 noon today (15)
Showers will occur at several places in the Western, Sabaragamuwa, Central, Southern, and North-western provinces, and in Anuradhapura district after 1.00 pm.
Heat Index at ‘Caution Level’ in the Northern, North-central, North-western, Western, Eastern and Southern provinces and in Monaragala district
“I extend my heartfelt wishes to all Sri Lankans for a peaceful and joyous Sinhala and Tamil New Year!” – President
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