Sri Lanka’s sovereign local currency rating is likely to be upgraded after a restructuring of domestic debt, Fitch Ratings said, while lifting the outlook on state-run Ceylon Electricity Board to positive from stable.
Fitch downgraded Sri Lanka’s local currency issuer default rating from ‘CC’ to ‘C’ after a domestic debt exchange on selective bonds was announced.
Fitch Downgrades Sri Lanka’s local rating to ‘C’ after DDR
Fitch confirmed a ‘B(lka)’ rating of state-run CEB which has been de-linked of the government, along with lifting of the outlook.
“The Positive Outlook reflects the likely upgrade of the Sri Lankan sovereign’s Long-Term Local-Currency Issuer Default Rating (IDR) to reflect the sovereign’s prospects following the completion of a domestic debt exchange (DDE),” Fitch said.
“We will equalise CEB’s ratings with that of the sovereign if the sovereign’s Long-Term Local-Currency IDR is upgraded to above ‘CC’, in line with our Government-Related Entities (GRE) Rating Criteria, resulting in a rating upgrade on the national scale.”