{
  "title": "Sri Lanka’s Sovereign Debt Restructuring: Lessons from Complex Processes",
  "publication": "IMF Working Papers, September 23, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2025/09/05/sri-lankas-sovereign-debt-restructuring-lessons-from-complex-processes-570102",
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  "summary": "Sri Lanka’s debt restructuring distinguishes itself from others by its complexity due to a particularly diverse creditor landscape and novel instruments issued in the restructuring.",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Publication date: September 23, 2025\n- By: Peter Breuer, Sandesh Dhungana, Mike Li\n- Series: Working Paper No. 2025/175; Issue: 175; Volume: 2025; Pages: 46\n- DOI: https://doi.org/10.5089/9798229024211.001\n- Stock No: WPIEA2025175\n- ISBN: 9798229024211\n- ISSN: 1018-5941\n- Citation provided in source: Peter Breuer, Sandesh Dhungana, and Mike Li. \"Sri Lanka’s Sovereign Debt Restructuring: Lessons from Complex Processes\", IMF Working Papers 2025, 175 (2025), accessed 8/28/2026, https://doi.org/10.5089/9798229024211.001"
    },
    {
      "heading": "Key findings and analysis",
      "content": "- Restructuring complexity\n  - Sri Lanka’s debt restructuring is distinguished by its complexity due to a particularly diverse creditor landscape and novel instruments issued in the restructuring.\n  - The majority of official debt was held by non-traditional creditors outside of the Paris Club.\n  - Domestic borrowing played an important role in Sri Lanka’s overall debt.\n- Eligibility and coordination constraints\n  - Sri Lanka was not eligible for the G20 Common Framework for Debt Treatments and therefore had to navigate challenges of a diverse creditor landscape requiring complex coordination across many stakeholders.\n- Creditor preferences and instruments\n  - Commercial creditors were particularly interested in new and complex instruments that would:\n    - share up- and downsides to the macroeconomic framework, and\n    - offer additional debt relief for implementing governance reforms.\n- IMF analytical approach\n  - For the first time, the IMF applied fully the newly developed Sovereign Risk and Debt Sustainability Framework to assess debt sustainability.\n- Macroeconomic backdrop\n  - The restructuring took place against the background of a very deep fiscal and balance of payments crisis that required sweeping policy solutions.\n  - The crisis and restructuring occurred in the context of a complex IMF-supported reform program.\n- Scope of the paper\n  - Reviews root causes of Sri Lanka’s debt problem, deliberation of its solution, and the designs, negotiations, and outcomes of the restructuring processes."
    },
    {
      "heading": "Policy implications and lessons",
      "content": "- Restructuring strategies and design\n  - Lessons from Sri Lanka’s experience can inform restructuring strategies and instrument design when confronted with:\n    - a highly diverse creditor base,\n    - significant domestic debt exposure, and\n    - creditor preferences for state-contingent and governance-linked instruments.\n- Role of the IMF\n  - The IMF’s role in facilitating debt-creditor engagement is highlighted as a key element that can inform future restructurings.\n- Analytical tools\n  - Full application of the Sovereign Risk and Debt Sustainability Framework illustrates the value of advanced analytical tools in assessing debt sustainability under complex creditor structures and macroeconomic stress."
    },
    {
      "heading": "Subjects and keywords (from source)",
      "content": "- Subjects: Asset and liability management, Debt Relief, Debt service, Debt sustainability, External debt, Public debt\n- Keywords: BOP financing gap, Debt relief, Debt service, Debt sustainability, debt-creditor engagement, Global, IMF's role, restructuring strategy, Sovereign Debt, Sovereign Debt Restructurings, Sovereign Defaults, Sri Lanka, Sri Lanka development bond, Sri Lanka's Debt problem, Sri Lanka's Debt restructuring\n\nSource: IMF Working Paper \"Sri Lanka’s Sovereign Debt Restructuring: Lessons from Complex Processes\" (Working Paper No. 2025/175, September 23, 2025).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/09/05/sri-lankas-sovereign-debt-restructuring-lessons-from-complex-processes-570102"
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    "Authors: Peter Breuer, Sandesh Dhungana, Mike Li",
    "Published: September 23, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229024211.001",
    "Publication date: September 23, 2025",
    "By: Peter Breuer, Sandesh Dhungana, Mike Li",
    "Series: Working Paper No. 2025/175; Issue: 175; Volume: 2025; Pages: 46",
    "DOI: https://doi.org/10.5089/9798229024211.001",
    "Stock No: WPIEA2025175",
    "ISBN: 9798229024211",
    "ISSN: 1018-5941",
    "Citation provided in source: Peter Breuer, Sandesh Dhungana, and Mike Li. \"Sri Lanka’s Sovereign Debt Restructuring: Lessons from Complex Processes\", IMF Working Papers 2025, 175 (2025), accessed 8/28/2026, https://doi.org/10.5089/9798229024211.001",
    "Restructuring complexity",
    "Eligibility and coordination constraints",
    "Creditor preferences and instruments",
    "IMF analytical approach",
    "Macroeconomic backdrop",
    "Scope of the paper",
    "Restructuring strategies and design",
    "Role of the IMF",
    "Analytical tools",
    "Subjects: Asset and liability management, Debt Relief, Debt service, Debt sustainability, External debt, Public debt",
    "Keywords: BOP financing gap, Debt relief, Debt service, Debt sustainability, debt-creditor engagement, Global, IMF's role, restructuring strategy, Sovereign Debt, Sovereign Debt Restructurings, Sovereign Defaults, Sri Lanka, Sri Lanka development bond, Sri Lanka's Debt problem, Sri Lanka's Debt restructuring",
    "**Working Paper**"
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