Sri Lanka’s Dollar Bonds Downgraded to D by S&P

Three of Sri Lanka’s dollar bonds were downgraded to D from CC after the government missed interest payments due on September 14 and 28. The bonds in question are its $1bn 6.85% 2024s, $1.4bn 7.85% 2029s and $1.5bn 7.55% 2030s. S&P said that Sri Lanka’s external public debt moratorium does not allow its to make coupon and principal payments due on its international sovereign bonds (ISBs). Regarding Sri Lanka’s issuer rating, S&P affirmed its selective default rating. The island nation is currently trying to reach an agreement with the creditors on its debt restructuring to gain the IMF’s approval for a $2.9bn four-year loan in mid-December.

Sri Lanka’s dollar bonds were trading flat at 22-23 cents on the dollar.