Sri Lanka’s Cabinet of Ministers has approved the proposal for the restructuring of international sovereign bonds by way of swapping existing bonds for new bonds in accordance with the parameters indicated in the debt sustainability analysis conducted by the International Monetary Fund (IMF).

In June, the Government of Sri Lanka reached a final agreement on a debt restructuring with members of the Official Creditor Committee (OCC) of major bilateral lenders.

In September, an agreement in principle was reached with international bondholders on a sovereign debt restructuring of approximately $ 14.2 billion in principle, following consensus discussions with the AdHoc Bond Holders, a group of international investors representing sovereign bondholders, and the Local Consortium of Sri Lanka.

Accordingly, the Cabinet approval has been granted for the proposal presented by President Anura Kumara Dissanayake for the restructuring of international sovereign bonds by way of swapping existing bonds for new bonds following an analysis conducted by the financial and legal advisors of the Government of Sri Lanka on the impact on the Sri Lankan economy.

The analysis takes into account the composition of Sri Lanka’s international sovereign debt, investors and settlements, and in accordance with the parameters indicated in the debt sustainability analysis conducted by the IMF under the provisions of the Extended Fund Facility (EFF) programme for Sri Lanka.