Fitch downgrades Sri Lankan credit rating to "RD"-Xinhua

Fitch downgrades Sri Lankan credit rating to "RD"

Source: Xinhua| 2022-05-20 13:29:13|Editor: huaxia

COLOMBO, May 20 (Xinhua) -- Fitch Ratings has downgraded Sri Lanka's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to "RD" (restricted default) from "C".

The credit rating agency announced the downgrading on Thursday.

On April 13, Fitch downgraded Sri Lanka to a "C" rating after the South Asian country announced that it had suspended debt servicing of several categories of its external debts, including bonds issued in the international capital markets and foreign currency-denominated loan agreements or credit facilities with commercial banks or institutional lenders.

In a statement, Fitch said that it downgraded Sri Lanka's LTFC IDR to "RD" following the expiry of the 30-day grace period on coupon payments that were due on April 18, 2022, on two international sovereign bonds.

"We have downgraded Sri Lanka's foreign-currency issue ratings to 'D' from 'C', given the default on the senior unsecured foreign-currency bonds and the cross-default clauses triggered in the other rated international foreign-currency sovereign bonds," Fitch said.

However, the rating agency kept Sri Lanka's Long-Term Local-Currency IDR at "CCC". Fitch said that the Sri Lankan government has continued to service local-currency debt.

Sri Lanka's credit rating has been dropping from "B" steadily since late 2019.

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