International media reported earlier that Sri Lanka ISB bondholders were not happy with the progress we made so far on negotiations. The government had initially proposed a 30% haircut with debt reprofiling. Details of the revised proposal are yet to be made available.
Rob Hawcroft has suggested a potential compromise involving a 25% haircut and approximately 2 1/2 years of Past Due Interest (PDI), aiming for a par recovery in the high 80s, nearly 90 cents. Additionally, two new bonds, with maturities of 5 years and 10 years, and a 6% coupon at a 12% exit yield, could potentially achieve a recovery in the low 60s.
Sri Lanka is looking to restructure its USD 12.55 Bn ISBs, with USD 1.8 Bn in past due interest, highlighting the complexity and importance of these negotiations for the country's financial stability.