Sri Lanka’s bonds hammered by default worries

Sri Lanka’s bonds hammered by default worries

LONDON - Sri Lankan government bonds tumbled heavily on Tuesday, a day after one of the main credit rating agencies, Moody's, warned about the mounting pressure on the country's finances.The government bonds fell as much 3.7 cents on the dollar ballooning the "spread" - bond market speak for risk premium - to 1,300 basis points.Only basket cases such as Venezuela and Lebanon, or countries like Zambia, Belize and Argentina, which are either going into or coming out of debt restructurings, have larger spreads."It is definitely the rating action (that has caused the fall in bonds)," said Richard Briggs, an emerging market portfolio manager at GAM."But it has been rough over the last couple of weeks," he added, referring to suggestions from some Sri Lankan ministers that the country might try