Fitch downgrades UL’s govt.-guaranteed bonds to ‘B-’

Fitch Ratings has downgraded the rating on SriLankan Airlines Limited’s (SLA) US$ 175 million government-guaranteed 7 percent unsecured bonds due on 25 June 2024 to ‘B-’, from ‘B’. 

Fitch said the rating action follows the downgrading of Sri Lanka’s Long-Term Foreign- and Local Currency Issuer Default Ratings to ‘B-’, from ‘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,” the rating agency said.

The Sri Lankan government held 99.5 percent of SLA at end-2019 through direct and indirect holdings.