ECONOMYNEXT – Sri Lanka’s Echelon magazine is hosting an online forum with Lee Buchheit, an international specialist who has worked on sovereign debt re-structuring in several countries.
The forum will begin at 1630hours on October 05.
Following multiple rating downgrades in a short time to CCC+ and high premiums Sri Lanka is now locked out of global markets.
In each of the coming years Sri Lanka has about 4-5 billion dollars in government debt to be repaid. Over 5-years there are about 7 billion dollars in international sovereign bonds maturing which cannot be rolled over as of current discounts.
As liquidity injections to enforce rate cuts hit Sri Lanka’s currency peg, triggering forex shortages, its foreign reserves have been run down not only to repay some maturing debt but also for current imports.
Economists have suggested Sri Lanka should restructure its external debt and seek IMF help.
Sri Lanka’s central bank turned to the IMF for support 16 times since its creation in 1950, after de-stabilizing the currency peg with liquidity injections.
But neither the country nor the central bank has a history of defaulting on its external debt over this period.
This webinar will explore the options available to a sovereign that chooses to restructures its external debt, how it can approach such a negotiation with its creditors, what to watch out for, and how to make the best of a bad situation.
The speaker, Lee Buchheit is a veteran of sovereign debt restructuring and is considered by many to be a world expert in the field.
He has worked on debt restructuring in soft-pegged countries liken Argentina and Venezuela as well as Greece, a country in a monetary union which had limited or no ability to print money on its own volition, and defaulted on what was effectively domestic currency debt issued under Greek law.
Lee Buchheit retired in 2019 after a 43-year career with Cleary Gottlieb Steen & Hamilton LLP.
His practice focused on international and corporate transactions, including Eurocurrency financial transactions, sovereign debt management, privatization and project finance.
He is the author of two books in the field of international law and more than 40 articles on professional matters.