Foreign bondholders would get bonds linked to gross domestic product (macro-linked bonds) with an initial haircut of 28 percent part of which will be reversed if economic growth exceeds expectations,

Local banks would be able to exchange 70 percent of their ISBs into dollar bonds with a 10 percent haircut.The statement said the initial joint framework was not consistent with the IMFThe balance 30 percent would be exchanged for rupee securities.

Past due interest will become a bond with an 11 percent hair cut. The same treatment is given to past due interest of foreign bondholders. Sri Lanka banks had written down their holdings by 50-pct but would still suffer a ‘one-day’ hit, analysts said.