Sri Lanka yesterday officially announced that no agreement was reached with the bondholders in the first round of talks on the restructuring terms.
“It is standard practice when a representative group of bondholders is formed, to entertain confidential discussions with such group and its appointed advisors. In the case of Sri Lanka, the Ad Hoc Group of Bondholders represents holders controlling more than 50% of the bonds, which makes them a privileged interlocutor for Sri Lanka,”
State Minister Shehan Semasinghe said in a statement.
It is well understood that given the price-sensitive nature of the negotiations, and according to market regulations, discussions with the Group and its advisors are to be conducted under non-disclosure agreements. This evidently restricts the ability of the Government to unilaterally report about the substance of the discussions, he said.
State Minister clarified that the cleansing statement, issued on 16 April, at the conclusion of this first round of confidential discussions with members of the Group, aimed at informing the Sri Lankan people, market participants, and other stakeholders about the debt restructuring exercise and the progress in negotiations.
“It provides the highest possible level of transparency within the internationally accepted practices in such circumstances,” he reiterated.
Semasinghe shared that the next steps would entail further consultation with the IMF staff regarding assessments of the compatibility of the latest proposals with program parameters.
“Following these consultations, we hope to continue discussions with the bondholders to reach common ground ahead of the IMF board consideration of the second review of Sri Lanka’s EFF program,” he said.