S&P upgrades Sri Lanka to CCC+/C

► SAYS RATINGS REFLECT THAT SRI LANKA'S CREDITWORTHINESS REMAINS VULNERABLE AND RELIANT ON FAVOURABLE FINANCIAL AND ECONOMIC CONDITIONS ▸ MAINTAINS A CAUTIOUS NOTE ON POTENTIAL DOWNSIDE RISKS, INCLUDING RENEWED FUNDING STRESSES, RISING INFLATION OR WEAKER FISCAL PERFORMANCE

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S&P Global Ratings yesterday raised Sri Lanka's long and short-term foreign currency sovereign credit ratings to 'CCC+/C', from 'SD/SD, while affirming its 'CCC+/C' ratings on local currency debt.

The outlook on both long-term foreign and local currency ratings is stable, with the transfer and convertibility assessment maintained at 'CCC+.

The rating upgrade indicates Sri Lanka's progress in restructuring its remaining commercial debt, including government-guaranteed SriLankan Airlines (SLA) bonds, following the December 2024 Eurobond exchange.

According to S&P, the ongoing negotiations over SLA debt have not disrupted the broader debt restructuring, supported by principles of comparability and most-favoured creditor clauses.