NEW YORK (NewsRadio); The government of Sri Lanka has requested a court in New York to dismiss the case filed by the Hamilton Reserve Bank based in Saint Kitts and Nevis over Sri Lanka’s failure to honour its sovereign bond payments.
The financial news agency Bloomberg reported that the government had requested a US judge to overthrow the case filed over Sri Lanka reaching debt default, stating that the case brought by one bank is an “apparent attempt to gain leverage over a nation in crisis and jump ahead of other foreign creditors.”
In June, Sri Lanka was sued in the US by the bondholder Hamilton Reserve Bank after defaulting on its debt for the first time in history while struggling to stop an economic meltdown.
Hamilton Reserve Bank Limited holds more than USD 250 million of Sri Lanka’s 5.875% International Sovereign Bonds which were due on the 25th of July.
It filed the suit in a New York federal court seeking full payment of principal and interest.
Hamilton Reserve, said in the lawsuit that the default is being “orchestrated by officials at the highest levels of government,” including the ruling Rajapaksa family, and accused Sri Lanka of excluding bonds held by domestic banks and other interested parties from an announced debt restructuring.
Sri Lanka, fell into default in May after the expiry of a 30-day grace period for missed interest payments on two of its sovereign bonds.
The government is currently holding discussions with the International Monetary Fund to secure a bailout package.
It has also commenced the process of restructuring Sri Lanka’s external debt.