Moody’s reviews Sri Lanka’s credit rating for a potential upgrade following bond-swap proposal

Moody’s has put Sri Lanka’s Ca long-term foreign currency credit score under assessment for a possible upgrade, the ratings agency announced on Wednesday. This follows the government’s proposal for a bond exchange, designed to finalize the restructuring of its international debt.

The bond exchange, initiated on Tuesday, is a key component of the nation’s ongoing $12.55 billion debt overhaul and efforts to restore economic stability.

Sri Lanka defaulted on its external debt for the first time in May 2022, struggling under a severe economic crisis due to a massive debt load and dwindling foreign currency reserves.

Moody’s also assigned a provisional Caa1 rating to the country’s new dollar-denominated debt instruments, which are part of the bond exchange initiative.

Source: Reuters

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