S&P ranks Sri Lanka 'select default' after default

Sri Lanka was downgraded to selective default by S&P Global Ratings on Monday after the government failed to meet an interest payment on some of its dollar bonds last week.

The company lowered the nation’s long-term foreign currency debt rating to SD from CC citing the missed coupon payment on its US$1.25 billion international sovereign bonds maturing in 2023 and 2028 on April 18. While the notes have a 30-day grace period, S&P doesn’t expect the government to meet the obligation.

Since then, Fitch Ratings downgraded the long-term foreign currency to C, one step above default, and Moody’s Investors Service lowered its score to Ca from Caa2.