Fitch Ratings, one of the world’s leading financial rating agencies, has downgraded one of the ratings on Sri Lanka’s financial condition.
Accordingly, Sri Lanka’s Long-Term Local-Currency (LTLFC) Issuer Default Rating (IRD) has been downgraded to ‘RD’ (Restricted Default) from the previous ‘C’.
A local currency credit rating is an indication of the issuer’s overall capacity to meet its financial obligations.
The ratings on its local-currency bonds tendered in the domestic debt exchange have been downgraded to ‘D’ from ‘C’ while its other four local-currency bonds not tendered in the domestic debt exchange have been affirmed at ‘C’.
The Long-Term Foreign-Currency (LTFC) IDR has been affirmed at ‘RD’, and the ratings on Sri Lanka’s foreign-currency bonds have been affirmed at ‘D’.
All issue ratings have subsequently been withdrawn.
The agency said its firm does not assign Outlooks to sovereigns with a rating of ‘CCC+’ or below.
The agency also said that Fitch has withdrawn the issue ratings of Sri Lanka’s foreign and local-currency bonds as these are no longer considered to be relevant to the agency’s coverage.