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Message: <blockquote data-quote="monson" data-source="post: 28574127" data-attributes="member: 30005"><h3>Sri Lanka bondholders ready for debt restructuring talks</h3>02/03/2023 | 02:46am ESTFeb 3 (Reuters) - Private international bondholders are ready to hold debt restructuring talks with Sri Lanka consistent with the parameters and targets set out in the International Monetary Fund's programme, their legal adviser said on Friday.Global investment companies Amundi Asset Management, BlackRock, HBK Capital Management, Morgan Stanley Investment Management and T. Rowe Price Associates Inc. are among the group of around 30 bondholders being advised by White & Case LLP, a New York based law firm.The combination of the pandemic, which ruined the tourist sector, the Ukraine war, which drove up the price of imported fuel and food, and economic mismanagement pitched the Indian Ocean island of 22 million people into its worst financial crisis in more than seven decades. And having run out of foreign currency to pay for basic imports, Sri Lanka defaulted on its foreign debt in May.It secured a preliminary deal on a $2.9 billion extended fund facility with the IMF on Sept. 1, though no funds have been disbursed as yet.The government has received financing assurances from key bilateral lender India, and it is also seeking assurances from the Paris Club of creditor nations, while China's export-import bank has offered two-year moratorium on debt repayments.The IMF is likely to begin disbursing funds once all of those assurances are in place, analysts say.Sri Lanka has to restructure debt payments on about $11 billion in bonds. And it has also sought assurances from private creditors."The Bondholder Group ... stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period," White & Case said in a statement.Bondholders have also called for Sri Lanka's domestic debt to be "reorganised in a manner that both ensures debt sustainability and safeguards financial stability," the statement said.They also requested the opportunity to express their views on the "overall design" of the IMF program, it added."The bondholders appear to be indirectly seeking a domestic debt restructuring, which Sri Lanka is yet to agree to," said Udeeshan Jonas chief strategist at CAL Group."The requirement seems to be more tilted towards reprofiling the domestic debt through maturity extensions rather for coupon or principal haircuts to bring down Sri Lanka's overall gross financing needs."Sri Lanka secured financing assurances from India last month. The Paris Club, which includes Japan as a second major lender to Sri Lanka, is also expected to give its assurances to the IMF "soon".The United States wants China and other creditors to provide credible and specific assurances to the IMF to help Sri Lanka unlock the bailout, a senior official said this week.Offering a two-year moratorium on debt repayments, the Export-Import Bank of China said it would support Sri Lanka's efforts to secure an IMF programme. (Reporting by Akriti Sharma in Bengaluru; Editing by Muralikumar Anantharaman, Tom Hogue and Simon Cameron-Moore)- <a href="https://www.marketscreener.com/news/latest/Sri-Lanka-bondholders-ready-for-debt-restructuring-talks--42886620/" target="_blank">https://www.marketscreener.com/news/latest/Sri-Lanka-bondholders-ready-for-debt-restructuring-talks--42886620/</a><h3>China confirms offer of two-year moratorium to Sri Lanka on loan repayments</h3>Beijing, China Edited By: PrishaUpdated: Feb 03, 2023, 06:27 PM ISTThe government of China on Friday confirmed that a two-year moratorium is being offered to Sri Lanka on loan repayments as the island nation battles to restructure $51 billion in foreign debt amid the financial crisis.The loan was provided by China to Sri Lanka under the multibillion-dollar Belt and Road Initiative programme of Beijing aimed at increasing trade through the construction of ports and other infrastructure across Africa and Asia. A $2.9 billion emergency loan was offered by the International Monetary Fund but was asking other creditors to cut debts which were resisted by Beijing because they feared other borrowers would demand similar reliefs. Foreign ministry spokesperson Mao Ning said that Beijing presented a plan to “provide an extension on debt service due in 2022 and 2023." “During that period, Sri Lanka would not have to pay the principal and interest due on bank loans," he added. China is the third-biggest creditor of Sri Lanka after Japan and the Asian Development Bank, which accounts for around 10% of its debt. However, the final settlement was blocked by its lack of agreement.The loans provided by China have been used by Sri Lanka for building an airport as well as other projects, which lacked funds.Last month India announced that it gave assurance to IMF to facilitate a bailout plan. Sri Lanka was given $4.4 billion by India as emergency credit.In April last year, Sri Lanka's foreign currency was depleted which led to power cuts, food shortages and a breakout of massive protests ousting the then-president and the prime minister.Debt repayment to Japan, China and other foreign lenders was also suspended.The government of Sri Lanka is currently cutting spending and has announced the reduction of the 200,000-member military by almost half by 2030. (With inputs from agencies)- <a href="https://www.wionews.com/south-asia/china-confirms-offer-of-two-year-moratorium-to-sri-lanka-on-loan-repayments-558581" target="_blank">https://www.wionews.com/south-asia/china-confirms-offer-of-two-year-moratorium-to-sri-lanka-on-loan-repayments-558581</a></blockquote>

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