Fitch Ratings Downgrades Sri Lanka's Local-Currency IDR to 'Restricted Default'

September 15, 2023

Fitch Ratings has downgraded Sri Lanka's Long-Term Local-Currency (LTLFC) Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'C'. This downgrade reflects the challenging economic conditions faced by the nation.

Furthermore, the ratings on Sri Lanka's local-currency bonds tendered in the domestic debt exchange have been lowered to 'D' from 'C'. However, the ratings for the remaining four local-currency bonds, which were not tendered in the domestic debt exchange, have been affirmed at 'C'.

The Long-Term Foreign-Currency (LTFC) IDR has been maintained at 'RD', while the ratings for Sri Lanka's foreign-currency bonds have also been affirmed at 'D'.

As a result of these changes, Fitch Ratings has withdrawn all issue ratings of Sri Lanka's foreign and local-currency bonds, as they are no longer considered relevant to the agency's coverage.

It's worth noting that Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below, reflecting the severity of the economic challenges facing Sri Lanka.