Sri Lanka decides to switch to dollar in ISB exchange: Reports

This is as per reports, which added the call for Request for Proposals (RfPs) seeks interested parties to serve as dealer cum manager in this initiative.

Described by the Ministry of Finance, Economic Stabilisation, and National Policies as the “Potential International Sovereign Bonds Exchange Offer,” the endeavour aims to restructure existing ISBs.

The government intends to replace current US dollar denominated ISBs with new ones in the same currency. The outstanding value of these ISBs amounts to $12.1 billion, a significant portion of the $22 billion external debt slated for restructuring.

Banks are invited to submit proposals to be considered for the role of Dealer Manager, collaborating with financial and legal advisors Lazard Frères SAS and Clifford Chance LLP. Simultaneously, Treasury and Central Bank officials are in London negotiating with commercial creditors, including ISB holders.

The Dealer Manager’s responsibilities encompass various tasks customary in sovereign debt exchange offers. These include preparing the exchange offer, coordinating with stakeholders to maximise ISB holder identification, assisting in the design and execution of the exchange offer strategy, and monitoring market conditions.

Observers view this move as pivotal for Sri Lanka’s financial outlook, potentially paving the way for increased international financial aid.

Charlie Robertson, head of macro strategy at FIM Partners, noted the significance, suggesting it signals progress toward a deal. Such exchanges have gained traction amid economic challenges exacerbated by the pandemic, with countries like Argentina relying on similar strategies to manage their finances post-default.

Fibre2Fashion News Desk (DR)