COLOMBO - The Government of Sri Lanka successfully completed the exchange of its existing bonds and issued new ones as part of its consent solicitation and invitation to exchange, which was initially launched on November 25, 2024. The settlement occurred on Monday, December 20, 2024, with the subsequent cancellation of the exchanged bonds.
The bond exchange involved a variety of bonds with varying maturities and coupon rates, totaling several billion dollars in principal amount outstanding. The exchange was met with high participation rates from bondholders, with percentages ranging from 73.13% to 99.64% for different bond series.
In exchange for the old bonds, Sri Lanka issued new eurobonds and local LKR bonds with maturities extending up to 2043. The new eurobonds include step-up macro-linked bonds due between 2030 and 2038 and governance-linked bonds due in 2035, with principal repayment schedules detailed in the announcement.
Additionally, the government issued exchange fee bonds due in 2024 with an aggregate principal amount of approximately $215 million. These will provide accrued consideration to holders of the new eurobonds, with specific amounts per $1,000 of nominal bond value to be settled today, December 24, 2024.
For holders who did not participate in the exchange or were ineligible, the government has set up an international holding period arrangement. Non-participating holders have until January 9, 2025, to certify their eligibility and provide settlement details to receive their exchange consideration. If they miss this deadline but submit the required information by February 18, 2025, they will still receive their exchange consideration shortly after this latter date.
The process also includes a cash proceeds arrangement for ineligible holders and those who fail to submit holding period instructions, where their exchange consideration will be sold on their behalf, and the net cash proceeds will be distributed to them.
This announcement, based on a press release statement, is a significant step in Sri Lanka's efforts to manage its debt obligations amid challenging economic conditions. The government's actions demonstrate an ongoing commitment to addressing its financial responsibilities and working with international bondholders.
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