SriLankan Airlines’ payment of US$ 6.125 million interest on its government-guaranteed US$ 175 million unsecured notes within the 30-day grace period has no impact on the bond’s long-term rating of ‘C’, Fitch Ratings said yesterday.
SriLanka Airlines this week said it paid the coupon payment on its US$ 175 million bond, though it did not divulge the size of the interest payment. “The notes, which are due in 2024, remain in breach of two specific events of default tied to the guarantor – the government of Sri Lanka - as governed by the notes’ trust deed. They are (i) the government’s 12 April 2022 announcement of a moratorium on the payment of principal and interest on its external debt, and (ii) the government’s default on the payment of interest on external debt amount exceeding US$ 25 million in April 2022, and the expiry of the associated grace period in May 2022,” Fitch said.
In addition, the debt moratorium overhang affecting external debt of the government and that of public sector borrowers such as SLA still in place, which Fitch views as a continuation of a default-like process for affected obligors,” the rating agency added.
Daily Mirror