Moody’s raises Sri Lanka’s ranking after debt overhaul approval

(Reuters) – Credit score rankings company Moody’s (NYSE:MCO) on Monday raised Sri Lanka’s long-term overseas foreign money issuer ranking to ‘Caa1’ from ‘Ca’ with a secure outlook, after the nation’s collectors accepted a $12.55 billion debt overhaul final week.

Sri Lanka’s credit score profile displays the discount in exterior vulnerability and authorities liquidity threat, and prospects for fiscal and debt sustainability, Moody’s mentioned in a report.

“Sri Lanka’s credit score fundamentals have improved over the previous two years… exterior vulnerability and authorities liquidity threat have each declined from elevated ranges,” Moody’s mentioned.

The island nation had defaulted on its overseas debt for the primary time in Might 2022 as a result of its excessive debt burden and dwindling overseas change reserves.

Its bondholders final week signed off on the federal government’s proposal to restructure its worldwide bonds because the island nation recovers from its worst monetary disaster in many years.

The ranking motion marked the conclusion of a evaluate Moody’s initiated final month, wherein it had indicated a potential improve.

Rankings company Fitch on Friday raised Sri Lanka’s long-term foreign-currency default ranking to ‘CCC+’ from ‘restricted default’.