COLOMBO: Sri Lanka has called for proposals from dealer managers to support its restructuring of some $12 billion of international bonds, the Finance Ministry said on Thursday, in a fresh sign that the island nation is closing in on finalizing its debt rework.

Sri Lanka defaulted on its foreign debt in May 2022 as the economy sank into its deepest financial crisis in decades due to a severe shortfall of dollars. The government was expected to start formal restructuring talks with bondholders this week.

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“In the context of the restructuring of its International Sovereign Bonds (ISBs), the Government of Sri Lanka is working towards launching an invitation to exchange its existing ISBs denominated in United States Dollars for new ISBs in the same currency,” the notice posted on the Finance Ministry’s website said.

An exchange proposal - an offer by an issuer to repurchase its outstanding bonds in exchange for new bonds with different terms as part of a debt restructuring - is usually launched once an agreement in principle has been reached between the creditor and a group of core bondholders.

Proposals have to be submitted by April 10.