Dec 02, Colombo: Fitch Ratings has downgraded the rating on SriLankan Airlines Limited’s (SLA) USD175 million government-guaranteed 7% unsecured bonds due 25 June 2024 to ‘CCC’, from ‘B-’.
The rating action follows the downgrade of Sri Lanka’s Long-Term Foreign- and Local-Currency Issuer Default Ratings to ‘CCC’, from ‘B-’. For details, see ‘Fitch Downgrades Sri Lanka to ‘CCC’’ on 27 November 2020.
The national carrier’s bonds are rated at the same level as its parent, the state of Sri Lanka, due to the unconditional and irrevocable guarantee provided by the state. The Sri Lankan government held 99.5% of SLA at end-2019 through direct and indirect holdings.
Fitch has rated SLA’s US dollar bonds at the same level as the sovereign due to the unconditional and irrevocable guarantee provided by the government. The rating is not derived from the issuer’s Standalone Credit Profile and thus is not comparable with that of industry peers.