Jan 07, Colombo: Fitch Ratings announced that Sri Lanka's forthcoming US dollar-denominated global bonds due 2019 have been assigned an expected rating of 'BB-(EXP)'.
The final rating is contingent on the receipt of final documentation conforming to information already received, the global rating agency said.
The expected rating is in line with Sri Lanka's Long-Term Foreign Currency Issuer Default Rating (IDR) of 'BB-' with Stable Outlook. The sovereign's Long-Term Local Currency IDR is also 'BB-' with Stable Outlook.
Relatively strong growth, a comparatively high level of human development and a solid payment record is a key rating driver for the 'BB-' rating for IDR.
The fiscal deficit which is estimated by Fitch to be 5.8% of GDP in 2013 and government debt burden of 77.2% of GDP in 2013 remain at relatively high levels, although the 2014 budget signals commitment to medium-term debt reduction and an ability to maintain a gradual fiscal consolidation trend are also factors in the rating.
The external finances form a weakness with a persistent but narrowing current account deficit and higher net external debt level (36.6% of GDP) compared with peers also rated in the 'BB' category (on average, 22.8% of GDP).
The full statement by Fitch Rating can be found here.