Dayasiri alleges ISB trading discount reduced after CBSL implies 30% hair cut

Sri Lanka Freedom Party MP Dayasiri Jayasekera on Saturday revealed in Parliament that the discount at which Sri Lanka’s International Sovereign Bonds (ISBs) were trading in Singapore on Friday had reduced after the Central Bank last week implying a 30% hair-cut.

He said SL’s ISBs were trading at 47 cents up from 30 cents before the CBSL announcement on the Domestic Debt Optimisation (DDO). He claimed traders and bondholders pocketed the benefit resulting in a loss of Rs. 8 billion to Sri Lanka and recalled the infamous Bond scam under the Yahapalanaya regime. This too when Sri Lanka ensured a five-day closure for bond markets.

Dayasiri warned that following the CBSL announcement, there was a risk of the SL ISBs discount minimising by 70 cents in view of a 30% haircut.

He opined that CBSL Governor Dr. Nandalal Weerasinghe’s comments that a 30% haircut is what Sri Lanka would be expecting pre-empted a better deal from being negotiated with external private creditors.