Fitch expects fewer ‘AAA(lka)’ firms after Sri Lanka rating scale revision
ECONOMYNEXT – Fitch Ratings said it expects fewer ‘AAA(lka)’-rated Sri Lankan issuers after its planned recalibration of Sri Lanka’s national rating scale by end-February 2019 following the island’s downgrade.
The recalibration is meant to reflect changes in the relative creditworthiness among Sri Lankan issuers following the downgrade of the country’s sovereign rating to ‘B’ from ‘B+’ on 3 December 2018, a statement said.
“The recalibration will result in rating actions for some issuers with Sri Lankan national ratings,” it said.
“We anticipate a reduction in the number of ‘AAA(lka)’-rated issuers after the recalibration exercise is finalised, expected by end-February 2019, as a result of the sovereign downgrade and the resultant changes to the relative ranking of credits in the country.”
AAA is the highest rating denoting the best quality companies, which are considered reliable and stable.
National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk, the rating agency said.
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 ratings scales or with other countries’ national rating scales.
(Colombo/February 05/2019 – SUB)