S&P cuts Sri Lanka

S&P said it cut Sri Lanka’s long-term foreign-currency sovereign rating to SD, or selective default, from CC and the ratings on its $1.25 billion of international bonds maturing 2023 and 2028 to D, or default, from CC. The agency, however, affirmed the CCC- long-term local-currency sovereign rating.

The downgrade follows Sri Lanka missing the interest payment due on its bonds maturing in 2023 and 2028 that were due on April 18, the agency said.

The grace period is 30 days, but S&P said it does not foresee the government making the payment since it reported it plans to restructure its foreign-currency debt. Government representatives were reported to have met with IMF officials last month to negotiate an economic recovery program and for emergency financial assistance.

The outlook on the local-currency rating is negative.

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