Moody's Upgrades Sri Lanka on Debt Restructuring

Moody's Investors Service has upgraded Sri Lanka's credit rating, following the conclusion of the country's debt restructuring of its dollar bonds, reports Bloomberg. This move by the rating agency, which occurred on Monday, reduces the risk of default on future bonds.

Sri Lanka's rating has been upgraded to Caa1 from Ca. While this rating still signifies a very high risk for the government according to Moody's, it represents a significant improvement for the island nation and its second upgrade this month.

Last week, Fitch Ratings upgraded Sri Lanka after the country secured substantial support from private creditors for its international bond restructuring. Moody's had placed Sri Lanka under review for a potential upgrade last month.

"Sri Lanka's credit fundamentals have improved over the past two years," analysts Anushka Shah and Gene Fang stated in Monday's Moody's report. "External vulnerability and government liquidity risk have both declined from elevated levels."

This positive assessment by Moody's highlights the progress Sri Lanka has made in addressing its severe debt crisis. The successful debt restructuring, involving both domestic and foreign creditors, has significantly improved the country's financial outlook and reduced the risk of default.