Sri Lanka’s sovereign rating, which is on par with Kenya and Ukraine, may be raised as funds from a $2.5 billion International Monetary Fund loan improved the “external liquidity situation,” Standard & Poor’s said, speaking to Bloomberg News.
The rating agency in October raised its outlook on Sri Lanka’s credit rating to positive from stable. The nation has a long-term foreign currency debt rating of B (financial situation varies noticeably), five levels below its highest investment grade of AAA.
Sri Lanka also had its outlook revised to stable from negative on Oct. 9 by Fitch Ratings. Which affirmed the country’s rating at B+, its fourth-highest non- investment grade
“The balance of payments crisis is behind us and the reserve position is stable,” Agost Bernard, S&P’s Singapore- based associate director, was quoted as saying. “The positive outlook means that the most likely outcome in the next move is for the rating going up.”
Sri Lanka is making concerted efforts at increasing its credit ratings. The Assistant Governor of the Central Bank Assistant Governor C.J.P. Siriwardena, speaking to the same news agency said Sri Lanka will next month choose an advisor from among six international banks to help the island improve its credit ratings.“We will be approaching the rating agencies with the selected advisor”.
Meanwhile, the country is already beginning to take advantage of the liquidity boon of $408 million granted by the IMF by lining up a dollar bond issue due at the end of this year.
Sri Lanka has sold $500 of US dollar bonds in October 2007 and October 2009. Last October’s issue was oversubscribed by 13 times due to the high yeild which was 5.06 percentage greater than similar maturity US Treasury bonds.