Sri Lanka has reached a tentative agreement with selected bondholders who hold 50% of the outstanding International Sovereign Bonds (ISBs). It is learned that the previous base case GDP for Micro Linked Bonds (MLBs) has been revised from USD 84.2 billion to USD 88.6 billion.
Under the base case scenario, Sri Lanka has agreed to a 28% haircut on principal and an 11% haircut on Past-Due Interest (PDI), along with USD 225 million in consent fees.
However, with the current economic performance potentially leading to a higher GDP in the best-case scenario, the country could end up with a reduced 15% haircut on principal.