S&P lowers Sri Lanka's sovereign rating to 'CC' indicating looming default

Suspension of external debt servicing by country triggers action

Global rating agency Standard and Poor’s (S&P) today lowered Sri Lanka’s long-term foreign currency sovereign rating from “CCC” to “CC” to reflect looming default on some affected obligations. The rating action follows the troubled Island nation's announcement on the suspension of normal external debt servicing.

It has also lowered long-term local currency sovereign credit rating from “CCC” to “CCC-”. At the same time, it affirmed the “C” short-term rating.

The outlook on ratings was negative. It reflects the high risk to commercial debt repayment in the context of Sri Lanka's economic, external, and fiscal pressures.

Rating agency warned that it