Fitch affirms Sri Lanka at ’Restricted Default’

Fitch Ratings announced today it has affirmed Sr Lanka's LongTerm Foreign-Currency Issuer Default Rating (IDR) at 'RD' (Restricted Default) and Long-Term Local-Currency IDR at 'CCC-'.

 Fitch typically does not assign Outlooks to issuers with a rating of ‘CCC+' or below. 

"The sovereign remains in default on its foreigncurrency obligations, while restructuring negotiations are ongoing with Sri Lanka's private external creditors," the rating agency said. 

The authorities’ recent announcement that a preliminary debt restructuring agreement has been reached, in principle, with members of the steering committee of the Ad Hoc Group of Bondholders (representing foreign holders of Sri Lanka's international sovereign bonds) and China Development Bank (A+/Negative) suggests progress is being made.