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Sri Lanka regulators tighten debt rating rules

EconomyNext – Sri Lanka’s capital markets regulators have tightened rating rules for debt, saying companies who get more than one rating would have to use the lowest when listing their instruments on the Colombo Stock Exchange.

The CSE said the rating requirements set out in the Listing Rule 2.2.1 (c) on listing of debt securities had been amended with effect from December 31, 2014.

"In the event an applicant entity (government entity, public corporation or company) has obtained two or more ratings for the debt security at the same time from different rating agencies, the lowest of such ratings shall be considered when listing," a CSE statement said.

It also said when guarantees from banks are provided by companies listing debt, the lowest ratings of banks with more than one rating should an "A" rating.

The new rules on listing debt securities had been approved by the Securities and Exchange Commission.

Debt listing on the Colombo bourse has been growing after the government offered tax breaks to encourage the bond market.

 

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