Moody’s Ratings has announced that it has placed the Government of Sri Lanka’s Ca long-term foreign currency issuer rating under review for an upgrade. The previous outlook was stable.
In addition, Moody’s assigned (P) Caa1 foreign currency senior unsecured ratings to Sri Lanka’s new USD-denominated debt issuances, part of the government’s exchange offer. These include the macro-linked bonds (MLBs), the governance-linked bond (GLB), and step-up and past-due interest (PDI) bonds.
The move to place the issuer rating on review follows the government’s recent announcement of an exchange offer, which, if successful, would finalize the restructuring of international bonds and reduce default risk on new issuances.
The restructuring is part of broader economic reforms supported by development partners like the International Monetary Fund (IMF), aiming to lower external vulnerability and government liquidity risk, while improving fiscal and debt sustainability.
The review will continue until the exchange offer concludes and the outcome of the restructuring is clear.
Moody’s highlights that Sri Lanka’s willingness and capacity for reform are key drivers behind this potential upgrade.
