By Sri Lanka is working on a plan to swap its current dollar bonds for new ones, which could help the country get more financial help from other countries. The Ministry of Finance asked banks to give ideas for this plan. They’ll work with Lazard Frères SAS and Clifford Chance LLP, which are financial and legal companies.
Sri Lanka is still talking with the people it owes money to, even though it couldn’t pay its debts almost two years ago. If these talks go well, Sri Lanka might get $337 million from the International Monetary Fund. This could mean they’re getting closer to a deal, according to Charlie Robertson from FIM Partners.
During the pandemic, many struggling countries have been swapping their local debts instead of international ones. Argentina did this a lot after it couldn’t pay its international debts in 2020.
In Sri Lanka, things got really bad in 2022 with high prices, not enough food and fuel, and the government falling apart. It was the first time since they became independent that they couldn’t pay their debts.
Sri Lanka hopes to fix its debt problems by the middle of the year and have good talks with the people they owe money to in London.
Recently, Zambia made progress in getting out of debt trouble, and Ghana is also working on fixing its debt issues. Investors are optimistic that all three countries might solve their debt problems by June, according to Robertson.
