Sri Lanka weighs favoured creditor clause to speed up debt talks with IMF

Sri Lanka is pursuing pacts with commercial and bilateral lenders to meet conditions for the IMF to disburse a $2.9 billion loan

Sri Lanka is considering using a special clause to expedite its debt-restructuring negotiations, according to people familiar with the matter, as prolonged talks risk delaying a crucial bailout from the International Monetary Fund.
 

The bankrupt nation is looking at introducing a “Most Favored Creditor” clause to assuage doubts among other creditors that China — which holds 52% of Sri Lanka’s bilateral debt — could be offered better terms. Such a clause would ensure the same terms are extended to all creditors even if an agreement with them has been sealed before a deal is reached with China. 

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