Sri Lanka’s Ministry of Finance announced the successful completion of its Consent Solicitation and Exchange Offer for International Sovereign Bonds (ISBs), achieving an extraordinary level of participation from bondholders. This development marks a significant milestone in the nation’s economic recovery efforts.
On November 25, 2024, Sri Lanka extended an official invitation to ISB holders, proposing an exchange of existing bonds for new debt instruments. This initiative followed an agreement in principle reached on September 19, 2024, with key international investors and domestic financial institutions representing approximately 50% of the outstanding ISBs.
Preliminary results revealed an impressive 98% participation rate across all bond series, underscoring strong investor confidence in Sri Lanka’s economic reform agenda.
Leadership’s Optimistic Outlook
President and Minister of Finance, Anura Kumara Dissanayake, lauded the bondholders’ overwhelming support, stating:
“This vote of confidence from our international and local bondholders is a testament to the collective resilience of Sri Lanka. The implementation of this debt exchange will deliver substantial debt relief, enabling us to redirect resources toward our development and social programs while ensuring long-term fiscal sustainability. Today, we turn the page on years of crisis and step into a brighter future for Sri Lanka.”
Dissanayake emphasized that the debt relief achieved through this exchange would bolster macroeconomic stability, foster growth, and strengthen relations with external creditors and international partners, including the International Monetary Fund (IMF).
Next Steps in the Process
The final results of the exchange offer are anticipated on December 16, 2024, with settlement scheduled for December 20, 2024. This landmark achievement is expected to provide Sri Lanka with much-needed fiscal breathing room while restoring the country’s credibility in global financial markets.
Gratitude to Stakeholders
Sri Lanka expressed gratitude to its international and domestic creditors, the Official Creditor Committee, the IMF, and other stakeholders who played pivotal roles in the success of this initiative. Their cooperation and goodwill were instrumental in navigating the complex negotiations and enabling the country to reach this historic milestone.
Contact Information for Further Inquiries
Sri Lanka’s debt advisors and key transaction facilitators are available to address any questions:
- Debt Advisors: Lazard Freres (Lk.Investors@lazard.com) and Clifford Chance LLP (ProjectSigiriya@CliffordChance.com)
- Exchange Agent: Sodali & Co. (srilanka@investor.sodali.com)
- Dealer Manager: Citigroup Global Markets Inc. (gosl.invitation@citi.com)
Sri Lanka’s announcement reflects the culmination of years of dedicated effort to rebuild its economy and regain its footing on the global stage. As the nation prepares to finalize the bond exchange, this development stands as a beacon of resilience and optimism for its economic future.
