Jan 21, Colombo: Fitch Ratings has affirmed SriLankan Airlines Limited's (SLA) USD 175 million 5.3% government guaranteed bonds due 2019.
The airline's bonds are rated at the same level as SLA's parent, the government of Sri Lanka (B/Stable) due to the unconditional and irrevocable guarantee provided by the government. The state held 99.5% of SLA as at end-2018 through direct and indirect holdings.
Fitch has rated SLA's US dollar-denominated bonds at the same level as the sovereign due to the unconditional and irrevocable guarantee provided by government. The rating is not derived from its issuer's standalone credit profile, and is therefore not comparable with that of industry peers.
Developments that May, Individually or Collectively, Lead to Positive Rating Action
- An upgrade of the sovereign rating
Developments that May, Individually or Collectively, Lead to Negative Rating Action
- A downgrade of the sovereign rating
For the sovereign rating of Sri Lanka, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 3 December 2018
The main factors that individually, or collectively, could trigger a positive rating action are:
- Improvement in external finances supported by higher non-debt inflows, or a reduction in external sovereign refinancing risks from an improved liability profile
- Improved policy coherence and credibility
- Stronger public finances underpinned by a credible medium-term fiscal strategy
Full Fitch Rating Report