Sri Lanka has reached a policy agreement with its international commercial creditors to restructure around USD 17.5 billion in foreign commercial debt as of the end of 2023.
The agreement was reached today (19) following discussions between the Ad Hoc Group of Bondholders (AHGB), representing international investors, and the Local Creditor Stakeholder Group (LCSL), representing domestic financial institutions.
Together, these two groups hold over 50% of Sri Lanka’s sovereign bonds.
Under this agreement, bondholders have agreed to a debt relief of 40.3% of the Net Present Value (NPV), based on an 11% discount rate.
This agreement provides Sri Lanka with greater debt relief than the unified framework established in July 2024 and also includes additional reductions in interest payments under the new terms.
Additionally, Sri Lanka has reached a policy agreement with the China Development Bank (CDB) to restructure approximately USD 3.3 billion in sovereign debt, covering the main financial terms.
As a result of agreements made with China Exim Bank, the Official Creditor Committee (OCC) for Sri Lanka, the CDB, and bondholders, Sri Lanka will receive over USD 17 billion in debt service relief during the International Monetary Fund (IMF) program period.
This includes approximately USD 2.4 billion from China Exim Bank, USD 2.9 billion from the Official Creditor Committee, USD 2.5 billion from the CDB, and USD 9.5 billion from bondholders.
Throughout this process, President Ranil Wickremesinghe has expressed his gratitude and appreciation to all of Sri Lanka’s creditors, the IMF, and the Secretariat of the Official Creditor Committee for their continuous and productive support.
