Fitch downgrades UL’s US$ 175mn bond

Fitch Ratings has downgraded the rating on SriLankan Airlines Limited’s (SLA) US$ 175 million government-guaranteed 7 percent unsecured bonds due 25 June 2024 to ‘C’ from ‘CC’. 

The rating action on SLA’s bonds follows the downgrade of Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating to ‘C’ from ‘CC’, and the downgrade of its foreign-currency bonds issued on international markets to ‘C’ from ‘CC’. For details on the sovereign rating action, see Fitch Downgrades Sri Lanka to ‘C’, published 13 April 2022. 

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. 

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.