Over 30 SL bondholders launch formal group for debt talks

More than 30 asset managers holding Sri Lanka’s international bonds announced yesterday (21) the formal launch of a creditor group to start debt restructuring talks with the island nation, according to a statement from legal advisor White & Case LLC.

Amundi Asset Management, BlackRock, HBK Capital Management, Morgan Stanley Investment Management, and T. Rowe Price Associates Inc. are among the members of the group’s steering committee, which has Rothschild & Co. as financial advisor.

“The group is broadly representative of Sri Lanka’s bondholder base, both by type of institution and by geography, and holds bonds across each outstanding series,” the statement added, though it didn’t specify the percentage of bonds it holds on the outstanding $ 12.6 billion overseas sovereign debt.

Sri Lanka has hired heavyweight financial and legal advisors Lazard and Clifford Chance, as it prepares for the difficult task of renegotiating its complex web of creditors, including bilateral lending from Japan, India, and China.

The creditor group said that it was ready to engage in talks with both Sri Lanka’s authorities and other creditors, adding that the country should “implement a package of meaningful reforms and fiscal adjustments”.

Economic mismanagement and the Covid-19 pandemic hit have left the country of 22 million people battling its worst financial problems since its independence in 1948, and a lack of foreign exchange reserves has stalled imports of essentials including fuel, food, and medicines.

An International Monetary Fund (IMF) staff mission arrived in Sri Lanka early this week to continue talks on a bailout programme. 

(The Hindu)