Global law firm Clifford Chance has, together with financial advisor Lazard, advised the Government of the Democratic Socialist Republic of Sri Lanka on the successful execution of its sovereign bond exchange offer, marking the end of a multiyear process for the country to restore debt sustainability following its moratorium in April 2022.

The sovereign bond exchange offer, the most complex in recent years, introduced a number of innovations to the sovereign debt restructuring architecture, including the issuance of macro-linked bonds and governance-linked bonds, with Clifford Chance advising on the legal structuring and drafting. The last step in the process, the final distribution of new bonds from the holding period arrangement, was successfully completed on 27 February 2025.

The successful execution of the deal adds to Clifford Chance’s extensive record of advising on complex sovereign debt restructuring mandates.

Clifford Chance partner Deborah Zandstra, who led on the mandate, said “It has been a privilege to advise and support Sri Lanka for the last two and a half years on the implementation of its debt restructuring objectives. Following the successful close of the sovereign bond exchange offer and as we approach the final stages of the broader process, we thank the Sri Lankan authorities for the trust placed in us and their close collaboration throughout this period. Similarly, we thank the IMF country team and Paris Club Secretariat for their collaborative engagement throughout.”

The core team assisting Deborah Zandstra on the sovereign bond exchange offer transaction was comprised of partner Jon Zonis and senior associates James Kelton and Sophie Wilkinson.

The team were further assisted by lawyers across the Clifford Chance network, including partner Avrohom Gelber and associates Paula Ferreira, Agata Radajczyk, David Rondon and Gil Shauly.

Clifford Chance has also advised Sri Lanka on the sovereign debt restructuring process as a whole, including a domestic debt restructuring, reaching agreement with Sri Lanka’s official bilateral creditors (primarily through its Official Creditor Committee and with the Export-Import Bank of China) and reaching agreement with its other commercial creditors, primarily China Development Bank. This involved working throughout the mandate with the Authorities in Sri Lanka and in collaboration with the secretariat of the Official Creditor Committee at the Paris Club and with IMF Staff in the context of Sri Lanka’s IMF-Supported Program. We are delighted that, on 28 February 2025, the IMF Executive Board approved the Third Review of Sri Lanka’s IMF-Supported Program.

Deborah was assisted on the overall mandate by a core team comprising senior associates Azam Taiyeb and James Kelton.

Clifford Chance looks forward to advising Sri Lanka through the final stages of the debt restructuring process in 2025.