Sri Lanka’s private creditors are considering a proposal to swap defaulted bonds with new securities with cash flow linked to the nation’s future growth, Bloomberg News reported on Monday, citing people familiar with the matter.
Under the plan, the security being mulled by Sri Lanka’s bondholders will pay less if growth falls to levels projected by the International Monetary Fund, the people said, asking not be identified as the discussions are private. Creditors view the multilateral fund’s economic forecast of about 3% for the next few years as pessimistic, the people said.
Sri Lanka is likely to receive final approval on a $2.9 billion bailout from the International Monetary Fund (IMF) early on Tuesday.