Fitch Ratings has downgraded the National Long-Term Rating of the Ceylon Electricity Board (CEB), Sri Lanka Telecom PLC (SLT), and Sri Lanka-based Lakdhanavi Limited.
Fitch Ratings has also downgraded the National Long-Term Ratings of 10 Sri Lankan banks.
The Ratings Agency stated that it has downgraded the Ceylon Electricity Board’s (CEB) National Long-Term Rating to ‘B(lka)’ from ‘AA-(lka)’. The Outlook is Stable. Fitch has simultaneously downgraded the National Long-Term Rating of CEB’s outstanding senior unsecured debentures to ‘B(lka)’, from ‘AA-(lka)’.
The rating action follows the downgrade of the Sri Lankan sovereign’s Long-Term Local-Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’ on 1 December 2022, and the subsequent recalibration of Sri Lanka’s National Rating scale to reflect changes in the relative creditworthiness among the country’s issuers.
Fitch Ratings also announced that it has downgraded Sri Lanka Telecom PLC’s (SLT) National Long-Term Rating to ‘A(Ika)’ from AA-(lka).
The Rating Agency stated that the outlook is Stable. Fitch has also downgraded the National Long-Term Rating on SLT’s senior unsecured debentures to ‘A(lka)’ from ‘AA-(lka)’.
Meanwhile, Fitch Ratings has also downgraded Sri Lanka-based Lakdhanavi Limited’s National Long-Term Rating to ‘A(lka)’, from ‘AA-(lka)’.
The Ratings Agency stated that the Outlook is Stable and the downgrade follows Fitch’s downgrade of the Sri Lankan sovereign’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’ in December 2022.
Furthermore, Fitch Ratings has downgraded the National Long-Term Ratings of 10 Sri Lankan banks following the recent sovereign downgrade and recalibration of the agency’s Sri Lankan national rating scale.
The Ratings Agency stated that the recalibration is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’/Under Criteria Observation on 1 December 2022.
Fitch Ratings added that the agency typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below.
The National Ratings of the Sri Lankan banks consider their creditworthiness relative to other issuers in the country. The recalibration of the Sri Lankan National Rating scale has resulted in downgrades of the National Long-Term Ratings of the following banks:
- Bank of Ceylon (BOC) to ‘A(lka)’/Rating Watch Negative (RWN) from ‘AA-(lka)’/RWN
- People’s Bank (Sri Lanka) (PB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN
- Commercial Bank of Ceylon PLC (CB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN
- Hatton National Bank PLC (HNB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN
- Sampath Bank PLC (Sampath) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN
- Cargills Bank Limited (CBL) to ‘A(lka)’/RWN from ‘A+(lka)’/RWN
- DFCC Bank PLC (DFCC) to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN
- National Development Bank PLC (NDB) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN
- Seylan Bank PLC (Seylan) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN
- Nations Trust Bank PLC (NTB) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN
Other Sri Lankan banks’ national ratings, which are not mentioned in this commentary, have not been affected by the recalibration exercise.
Full report CEB:
Full report SLT : https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-sri-lanka-telecom-to-a-lka-outlook-stable-12-01-2023
Full report Lakdhanavi Limited : https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-lakdhanavi-limited-to-a-lka-outlook-stable-12-01-2023
Full report SL banks : https://www.fitchratings.com/research/banks/fitch-downgrades-10-sri-lankan-banks-ratings-12-01-2023 (NewsWire)