A document from the International Monetary Fund has disclosed that Sri Lanka completed its debt treatment with the China Development Bank (CDB).
The IMF said that the debt treatment is in alignment with program parameters and met the standards for comparability of treatment (COT), as assessed by the Official Creditor Committee.
The document released inline with a virtual press conference by Peter Breuer, Senior Mission Chief for Sri Lanka on Tuesday (4) disclosed that the authorities started with technical exchanges with the CDB, including in person in Colombo in May 2023 and in Beijing in October 2023, to reconcile their DSA modeling and advance technical discussions.
The authorities reached agreement on an agreement in principle with China Development Bank in November 2024, assessed by IMF staff as consistent with debt sustainability.
The Official Creditor Committee assessed this agreement in principle as consistent with comparability of treatment.
The document from the IMF showed that the authorities completed their debt treatment with CDB and started paying on restructured debt in December 2024. It added that Sri Lanka has reached a significant milestone in its efforts to restore debt sustainability with the successful completion of a bond exchange.
It added that the authorities finalized the Eurobond exchange in December, achieving an impressive 98 percent participation rate. This success followed the activation of collective action mechanisms, in accordance with the Agreements in Principle (AIPs) established with the external bondholder committee and the local bondholder consortium on September 18.
These agreements were evaluated by staff and deemed consistent with debt sustainability. Additionally, the Official Creditor Committee (OCC) confirmed that the agreements met the standards for comparability of treatment (COT).