UPDATE 1-Sri Lanka dollar bonds drop after government pushback on bondholder plan
(Rewrites throughout, updates prices)
By Libby George
LONDON, Oct 19 (Reuters) - Sri Lanka's sovereign dollar bonds fell more than 2 cents on Thursday, Tradeweb data showed, after authorities from the island nation expressed "serious reservations" about a debt restructuring proposal put forward by international bondholders.
Sri Lanka is in the midst of a debt restructuring after defaulting last year during a punishing economic crisis.
The November 2025 maturity fell at the quickest pace, losing 2.45 cents as of 0946 GMT, but most of the country's sovereign dollar bonds had lost 2 cents or more.
International bondholders sent a proposal to the government on Oct. 2 on how to overhaul its $12 billion of Eurobonds that envisaged a write-down, or haircut, on both capital and interest as well as the issuance of a so-called macro linked bond.
The plan, which was widely seen as beneficial for the country's bondholders, saw bond chalk up some healthy gains in recent days.
But Sri Lanka's finance ministry said in a statement dated Oct. 18 that the country was not happy with proposal.
"The authorities have already expressed to the bondholders' their serious reservations about the construct of the macro-linked bonds proposed by the group," it said in the statement.
Separately, Japan's top currency diplomat said one more push was needed to resolve Sri Lanka's debt problems. (Reporting by Libby George; Editing by Karin Strohecker and Alison Williams)
