By Karin Strohecker

LONDON (Reuters) – The Maldives has chosen U.S.-headquartered Centerview Partners to be its adviser on debt matters as the country battles to stave off a financial crisis, two sources familiar with the situation said.

Concerns have grown in recent months that the island nation could become the first country to default on Islamic sovereign debt as the government faces a $500-million Sukuk maturing in 2026 and dwindling foreign currency reserves.

According to the World Bank, the country’s total public and publicly guaranteed debt stood at $8.2 billion, or equivalent to 116% of GDP, in the first quarter of this year.

About half of that is external debt, with a big chunk owed to regional rivals China and India, which have extended $1.37 billion and $124 million in loans, respectively, World Bank data shows.

Both countries have in recent weeks shored up their support to the Maldives, easing investor concerns about a debt crisis and helping to bolster its international bonds.

Beijing signed a financial cooperation agreement with the Maldives in September to strengthen trade and investment. India subscribed to a $50-million Maldives Treasury bill last month and said in October it had approved currency swap deals worth more than $750 million.

The Maldives’ sole international bond, which had tumbled to 66 cents on the dollar in early September as debt concerns deepened, currently trades around the 80-cents mark, Tradeweb data showed.

That is well above the threshold of 70 cents, below which debt is considered distressed.

Investment and advisory firm Centerview Partners, founded in 2006, has recently been on a push to increase its sovereign advisory business and has been hiring widely over the past year to beef up its global operations both in Paris and New York.

The Maldives’ government did not immediately respond to a request for comment.