ECONOMYNEXT – A committee of bondholders who negotiated with Sri Lanka to restructure defaulted bonds for GDP-linked new bonds, the first of its kind, have said they will take up the new bonds and urged all other holders to participate.
The steering committee of the so-called ad-hoc group of bond holders own about 40 percent of 12.55 billion dollars of defaulted bonds while a group of local bondholders including banks have around 12 percent.
The Steering Committee said it is made of funds managed or advised by Amundi Asset Management, Barings LLC, BlackRock and its subsidiaries, Eaton Vance Management, Fidelity International, Grantham, Mayo, Van Otterloo & Co. LLC, HBK Capital Management, Morgan Stanley Investment Management, Neuberger Berman, T. Rowe Price Associates, Inc., and Wellington Management.
“The Steering Committee encourages all holders of Sri Lanka’s international bonds to review the documentation published by Sri Lanka today, note the respective instructions and deadlines embedded in the Invitation, and participate in the exchange as early as possible,” a statement said.
“They believe that the successful completion of the transactions contemplated by the Invitation and the debt relief provided under the restructuring terms will make a substantial contribution to ensuring the sustainability of Sri Lanka’s external debt in the medium term, paving the way for the country to achieve strong, sustainable, and inclusive economic growth.”
The committee negotiated bonds, whose principal and interest go up if GDP grows faster than expected.
Sri Lanka has generally grown at rates of around 5 percent a year including during a 30-year war, unless macro-economists denied monetary stability by suppressing rates with inflationary liquidity operations. (Colombo/Nov26/2024)