NEW YORK, June 24 (Reuters) - Formal negotiations

between Sri Lankan authorities and international private

creditors on over $12 billion in bonds are set to resume

imminently after a group of bondholders signed non-disclosure

agreements late last week, three sources told Reuters on Monday.

The resumption of the talks comes days after the

International Monetary Fund board approved a $336 million

installment of the IMF's $2.9 billion program. About $1 billion

has already been disbursed.

A representative of the bondholders did not immediately

respond to a request for comment.

Earlier, the group said its negotiating committee included

Amundi Asset Management, BlackRock ( BLK ) and its subsidiaries, Eaton

Vance Management, Grantham, Mayo, Van Otterloo & Co (GMO) LLC,

HBK Capital Management, Morgan Stanley Investment Management,

Neuberger Berman, T. Rowe Price Associates Inc, and Wellington

Management.

Separately, Sri Lanka said it will sign a debt restructuring

agreement with a group of creditor nations on Wednesday - a

major step to help stabilise the country's finances.

Sri Lanka in April rejected an initial bondholder proposal,

citing some of its "baseline" assessments and a lack of a

contingency option in the case of continued economic weakness as

two main reasons for not reaching a deal.

Sri Lanka plunged into its worst financial crisis in more

than seven decades in 2022 with a severe dollar shortage sending

inflation soaring to a high of 70%, its currency to record lows

and its economy contracting 7.3%. The IMF bailout secured in

March last year helped stabilize economic conditions.

Avanti Save at Barclays Bank in Singapore said she expected

the restructuring to be completed within months.

Barclays calculates that a debt restructuring could see

bonds issued with a starting coupon of 4% that would rise to 8%,

and maturities on the debt extended by 10 years. Combined with

20-30% in write down of the principal - a so-called haircut -

recovery values could be close to the mid-50 cents in the

dollar, Save said in a note to clients.

"We believe the sovereign may consider sweetening the deal

for bondholders through creative recovery options for PDI and

incorporating contingent payout structure (like VRI or MLB),"

she added, referring to instruments where payout is dependent on

economic performance or other variables.

Sri Lanka's international dollar bonds rose as much as 0.8

cents on Tuesday to trade around the 60 cents in the dollar

threshold, Tradeweb data showed.

The island nation will hold presidential elections by

mid-October.