In this issue

Tinkering around the edges
Sri Lanka’s approach to its foreign bondholders is less impressive than it appears

At first sight, it was a triumph. Despite the pandemic, Sri Lanka maintained its spotless debt servicing record over the two years to 2021. It was a triumph because the country’s sliding credit rating had all but locked it out of global credit markets. In this century, countries that cannot roll over their debt have had little choice but to restructure those obligations.

Since the 1970s, governments have restructured their foreign currency debt to banks and bondholders at least on 100 occasions. It is feared that the pandemic’s impact on public finances in some countries will challenge many more countries. Sri Lanka’s own foreign debt sustainability is questionable. Vanity, the cultural shame of a deadbeat debtor and the fear of being shut out of capital markets in the future, are driving politicians and bureaucrats to maintain a spotless debt service record.

It has been rare for a county to get a haircut on its debt without defaulting. Announcing a moratorium on debt repayments (a default) is one approach. Another is a pre-emptive restructuring; of early negotiations with creditors before the inevitable. Pre-emptive restructuring could lead to reprofiling of debt, a relatively gentle form of restructuring, in which the maturity of bonds is extended but the amount owed and the interest rate remain unchanged.

By expending its few resources to pay bondholders in full now, Sri Lanka will have to enforce deeper cuts on other creditors in the future. The economic pain of a later adjustment will also be greater. It’s time to end the tinkering around the edges.

Echelon Magazine Description:

Intelligent Storytelling

The one thing that will define the Echelon magazine will be the quality of the storytelling. Echelon,published monthly, will cover in depth Sri Lanka’s most successful businesses, examine their winning strategiesand profile their leaders in immersive stories. Great stories are also never limited to words, and our approach includes rich photography, bold graphics and leading edge design which together will make for a compelling read.

But business doesn’t start and end in a boardroom;it extends to the golf club greens, to international travel and to pursuits that blurthe lines between commercial venture and sheer passion. The Echelon team will present the best in business and lifestyle coverage that will appeal to an exclusive and affluent readership: an otherwise hard to reach demographic.

Content will be developed by one of the most experienced and proven teams of editors, financial journalists, photographers and designers in the country.This team has already raised the bar for powerful and expertly crafted business news. Shamindra Kulamannage, will lead the editorial team.

The reputation of Echelon is being built on the separation between editorial and advertising. However we are also looking for the most creative and impactful new formats that can be applied in our magazines, iPad app as well as website to help our clients reach our audience. We are flexible and creative and we will have a solution for every single advertiser who wants to reach our audience.

We are passionate about creative results and about working with our advertisers to help them create bespoke multi platform creative solutions with our in house creative team and of course our sales team.

Echelon will be a great place to show off the products and capabilities of our clients because they will be surrounded by an editorial product that is expertly crafted, full of integrity and intelligence.