Sri Lanka's global bond issue rated 'B+' by S&P

SINGAPORE - Standard & Poor's has assigned its 'B+' issue rating to a US$1 billion global bond issued by the Government of Sri Lanka (B+/Stable/B).

S&P says the senior unsecured bond constitutes direct, unconditional, unsubordinated, and unsecured general obligations of the issuer, and payments will be backed by the full faith and credit of Sri Lanka. The bond has a 10-year maturity.

“The sovereign credit rating on Sri Lanka reflects the country's relatively low wealth, improving but still moderately weak external liquidity, and a high
Government debt and interest burden,” S&P says.

“In addition, while the Government has recently taken steps to strengthen governance, we consider current gaps in institutional capacity to pose risks to Sri Lanka's institutional and governance effectiveness.

“These rating constraints weigh against the country's robust growth prospects. The factors that help Sri Lanka's growth are Government investment, including measures to reconstruct the northern districts, the improving financial performance of public enterprises, increasing tourist arrivals, and declining inflation, which we expect to remain in single digits.” www.standardandpoors.com (ATI).