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ஜெனரல்
Fitch Ratings affirmed the rating on SriLankan Airlines Government-Guaranteed bonds at ‘C’ on May 9th where US$175 million with a 7 percent interest rate, are due on June 25, 2024. The rating is supported by the unconditional guarantee of the government of Sri Lanka, whose Long-Term Foreign-Currency Issuer Default Rating is ‘RD’.
SriLankan Airlines’ bonds are rated at ‘C’ due to Fitch's assessment of average to below-average recovery prospects following a default, aligning with Fitch’s Corporates Recovery Ratings and Instrument Ratings Criteria, and Country-Specific Treatment of Recovery Ratings Criteria. Notably, Fitch hasn't assigned a Recovery Rating to the bond as issuers near default show little distinction between ‘RR4’ and ‘RR6’ recoveries.
The airline missed interest payments due on December 25, 2023, triggering an event of default, following previous missed payments in June 2023 and December 2022. Additionally, the default was compounded by the Sri Lankan government's announcement on April 12, 2022, declaring a debt moratorium on certain sovereign and public-sector entities’ external debt, leading to non-payment of interest on the government’s external debt. SLA’s US dollar bonds are included in the government's debt moratorium, influencing Fitch's assessment of recovery prospects for investors.
