Pakistan’s bonds slumped to just half their face value on Friday, after the Financial Times said a United Nations development agency was urging the cash-strapped country to restructure its debt.

Devastating floods engulfed large swathes of the country this month, affecting 33 million people, causing damage estimated at $30 billion, and killing more than 1,500, fanning fears that the country will not meet its debts.

Both the government and UN Secretary-General Antonio Guterres have blamed climate change for the extreme weather that led to the flooding, which submerged nearly a third of the country.

Finance Minister Miftah Ismail had on Sept 18 said the country will “absolutely not” default on debt obligations despite catastrophic floods.

Pakistan was able to bring an International Monetary Fund (IMF) programme back on track after months of delay, thanks to tough policy decisions. But the positive sentiment was short-lived before the catastrophic rainfall hit.

A memorandum the United Nations Development Programme is set to hand Pakistan’s government this week says its creditors should consider debt relief in the wake of the floods, according to the Financial Times.

The memorandum further proposed debt restructuring or swaps, in which creditors would let go of repayments in exchange for the country’s agreement to invest in climate change-resilient infrastructure, the paper said.

The foreign office in Islamabad did not immediately respond to a Reuters request for comment on the memorandum.

Read more: Flood-hit Pakistan should suspend debt repayments, says UN paper

The finance and information ministers could not be immediately reached for comment.

A UNDP spokesperson in Pakistan did not respond to a request for comment.

Friday’s signals strengthened fears of a default, hammering the country’s international government debt.

One of the main sovereign bonds due for repayment in 2024 slumped more than 9 cents to about 50 cents on the dollar, while another due in 2027 fell to about 45 cents.

Prime Minister Shehbaz Sharif appealed to the world and rich nations for immediate debt relief, saying what had been done was commendable, but adding, “It’s far from meeting our needs.”

In an interview on Friday, PM Shehbaz told Bloomberg TV in New York that Pakistan had taken up the debt relief issue with UN Secretary General Antonio Guterres and world leaders.

“We have spoken to European leaders and other leaders to help us in Paris Club, to get us a moratorium,” he said, referring to rich nation creditors.

The country of 220 million would not be able to stand on its feet, Shehbaz added, “unless we get substantial relief”.

He said Pakistan would also seek relief from long-time ally China, to which it owes about 30 per cent of its external debt.

Both the government and Guterres have blamed the flooding on climate change.

‘We aren’t seeking debt relief from commercial creditors’: Ismail

Meanwhile, the finance minister said the government was not seeking any relief from commercial banks or Eurobond creditors.

“Given the climate-induced disaster in Pakistan, we are seeking debt relief from bilateral Paris Club creditors,” Ismail said in a tweet.

“We are neither seeking, nor do we need, any relief from commercial banks or Eurobond creditors.”

He highlighted that the country had $1bn bond due in December which it would pay on time and in full. “We have been servicing all our commercial debt and will continue to do so.”

He continued that Pakistan’s “Eurobond debt is only $8bn due between now and 2051”, insisting that it was not a large burden.

A significant portion of our debt is from friendly countries who have said they will re-roll their deposits, the minister added.