Fitch Ratings on Wednesday downgraded the rating on SriLankan Airlines Ltd's (SLA) US dollar-denominated government-guaranteed bonds to 'B+' from 'BB-', two days after issuing a downgrade on Sri Lanka’s country rating.
In a statement, Fitch said: “This follows the downgrade of Sri Lanka's Long-Term Foreign and Local-Currency Issuer Default Ratings to 'B+' with a Negative Outlook. The national carrier's bonds are rated at the same level as SLA's parent, the state of Sri Lanka, due to the unconditional and irrevocable guarantee provided by the state”.
It said the Sri Lankan sovereign faces increased refinancing risks on account of high upcoming external debt maturities amid the country's vulnerability to a shift in investor sentiment. Furthermore, the sovereign's external liquidity position remains strained, reflecting pressure on foreign-exchange reserves. The recent downgrade also reflects deteriorating public finances driven partly by consistently low general government revenues, the rating agency added.
The state held 99.5 per cent of SLA through direct and indirect holdings at end-2015. - END-
The final rites of veteran broadcaster, writer, and lyricist Nirmala de Alwis will be held today at Peradeniya.
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