Fitch Ratings – Colombo – 19 Jan 2023: Fitch Ratings has downgraded the National Long-Term Ratings of five Sri Lankan finance and leasing companies (FLCs) after the recent sovereign downgrade and recalibration of the agency’s Sri Lankan National Rating scale.
The FLCs’ ratings remain on Rating Watch Negative (RWN). The downgrades follow similar action on 10 Sri Lankan banks. For details, see “Fitch Downgrades 10 Sri Lankan Banks’ Ratings”, dated 12 January 2023.
The recalibration of the national scale is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’/Under Criteria Observation on 1 December 2022.
Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below.
National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national scale ratings are denoted by the unique identifier ‘(lka)’.
Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale.
National scales are not comparable with Fitch’s international rating scales or with other countries’ national rating scales. For details, see “Fitch Ratings Recalibrates Sri Lanka’s National Rating Scale”, dated 19 December 2022.
Fore more details- https://www.fitchratings.com/research/structured-finance/fitch-downgrades-five-sri-lankan-finance-leasing-companies-ratings-maintains-rwn-19-01-2023
