SriLankan Airlines will make interest payment during grace period

By Mary-Katherine Stinson

Lexington, Ky., July 22 – SriLankan Airlines Ltd.’s board of directors announced that the missed coupon payment on its $175 million 7% bonds due 2024 (ISIN: XS2010609662) will be paid in full before the expiration of the 30-day grace period that applies to any non-payment default, according to a notice.

As previously reported, the bonds are guaranteed by the government of the Democratic Socialist Republic of Sri Lanka, the 99.52% shareholder of the company.

The coupon payment for the bonds was due on June 25.

As previously reported, the company announced in a notice on June 24 that events of default occurred because of the missed payment. A default occurring in the payment of interest on external debt of the guarantor in an amount exceeding $25 million constituted an event of default under the conditions of the bonds.

In addition, an interim debt policy announced on April 12 constituted a general moratorium on the payment of principal and interest on external debt by the guarantor, which also constituted an event of default under the bonds.

At that time Sri Lanka sought urgent financial assistance from the International Monetary Fund. This followed the April announcement of the interim policy regarding the servicing of Sri Lanka’s external public debt.

The flag carrier of Sri Lanka is based in Katunayake, Sri Lanka.

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