Sri Lanka Secures Agreement to Restructure $17.5 Billion in External Debts

Sri Lanka announced an in-principle agreement to restructure approximately USD 17.5 billion of external commercial debts with international and domestic bondholders. This move follows the island nation’s first-ever sovereign default in April 2022 and comes as part of ongoing negotiations with creditors, including China Development Bank, and the IMF.

Sri Lanka has reached an in-principle agreement with external commercial creditors to restructure around USD 17.5 billion of external commercial debt, officials announced Thursday.

The deal involves International Sovereign Bonds holders and local financial institutions, who collectively hold over 50 percent of the Bonds, the President's Media Division (PMD) confirmed. This follows Sri Lanka's sovereign default in mid-April 2022 and subsequent halt to debt services.

President Ranil Wickremesinghe stated that the nation's bankruptcy would officially end Thursday, a remark aimed at boosting his re-election campaign ahead of the September 21 presidential election. The PMD also disclosed a finalized agreement with China Development Bank regarding the restructuring of USD 3.3 billion of sovereign debt.

(With inputs from agencies.)