Fitch affirms SriLankan’s guaranteed bond at ‘BB-’

Fitch Ratings has affirmed the rating on SriLankan Airlines Limited’s (SLA) US dollardenominated government guaranteed bonds at ‘BB-’. 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 of principal and interest of the notes provided by government. According to Fitch, the state held 99.5 percent of SLA through direct and indirect holdings at end-2015. SLA is the national airline of Sri Lanka, and has a 72 percent share of the total airline seating capacity of the country.

“The government has identified tourism as a key economic growth driver in the medium term; and the company is well positioned to capture the benefits of this trend as the leading airline in Sri Lanka,” Fitch Ratings said. Tourist arrivals to Sri Lanka rose to 1.8 million in 2015 from 1.0 million in 2012.