The Colombo Stock Exchange (CSE) has facilitated the adoption of two ambulances for the 1990 Suwa Seriya Foundation.
This is in response to the programme, ‘Adopt an Ambulance’ which has been launched by the Board and Management of the 1990 Suwa Seriya Foundation.
Suwa Seriya is a pioneering ambulance service launched by the Government of Sri Lanka to provide emergency medical care to those in need, especially in rural and remote areas.
Recognising the importance of this service, the CSE came forward to support the continuation of providing a lifesaving emergency medical assistance in Sri Lanka.
Commenting on the donation, the CSE Chairman Mr. Dilshan Wirasekara stated, “We believe that, it is our responsibility to support and empower the communities in which we operate.”
“We are happy that our donation to adopt two ambulances for the 1990 Suwa Seriya Service will undoubtedly help to maintain their services to save lives and provide much-needed healthcare access to remote areas in the country. We are honoured to be a part of Suwa Seriya’s noble mission of providing free pre-hospital care services to all Sri Lankans.”
The CSE, which is represented countrywide through a branch network, will continue to support and empower the communities in which it operates.
Fitch Ratings – Hong Kong – 05 Jul 2023: FitchRatings has downgraded Sri Lanka’s Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to ‘C’ from ‘CC’. The issue ratings on local-currency bonds have also been downgraded to ‘C’ from ‘CC’. The Long-Term Foreign-Currency (LTFC) IDR has been affirmed at ‘RD’ (Restricted Default) and the Country Ceiling at ‘B-‘.
A full list of rating actions is detailed below.
Fitch typically does not assign Outlooks to ratings of ‘CCC+’ or below.
Key Rating Drivers
Domestic Debt Restructuring Proposal Announced: The downgrade of Sri Lanka’s LTLC IDR reflects Fitch’s view that a sovereign local-currency debt restructuring process has begun, as parliament approved the government’s domestic debt restructuring plan on 1 July. On 4 July, the authorities launched a formal exchange offer to bondholders for those bonds that are eligible for the restructuring.
Restructuring Plan Outlined: The debt restructuring announcement outlines a domestic debt optimisation (DDO) strategy, which includes treatment of Sri Lanka’s domestic debt as well as domestically issued foreign-currency debt. The key elements of the DDO includ: conversion of CBSL’s T-bills and provisional advances to the government into treasury bonds (T-bonds); exchange of superannuation funds’ T-bonds into longer maturity T-bonds; exchange of outstanding Sri Lanka development bonds (SLDBs), which are US-dollar denominated but governed by local law, into new US dollar or Sri Lankan rupee instruments; and, restructuring of local-law foreign-currency denominated bank loans of the government.
The debt restructuring excludes banks’ holdings of Sri Lankan rupee-denominated treasury securities, but bank holdings of SLDBs will be affected.
DDO Qualifies as DDE: In Fitch’s view, the proposed DDO will qualify as a distressed debt exchange (DDE) under our criteria, as it entails a material reduction in terms and is needed to avoid a traditional payment default. We will downgrade the LTLC IDR to ‘RD’ upon closing of the exchange offer and following confirmation that the exchange will be executed. The government plans to complete the exchange within July.
Foreign Currency IDR in Default: The sovereign remains in default on foreign-currency obligations and has initiated a debt restructuring arrangement with official and private external creditors. The Ministry of Finance had issued a statement on 12 April 2022 that it had suspended normal debt servicing of several categories of external debt, including bonds issued in international capital markets, foreign currency-denominated loan agreements and credit facilities with commercial banks and institutional lenders.
ESG – Governance: Sri Lanka has an ESG Relevance Score of ‘5’ for Political Stability and Rights as well as for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model (SRM). Sri Lanka has a medium WBGI ranking in the 45th percentile, reflecting a recent record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption.
ESG – Creditor Rights: Sri Lanka has an ESG Relevance Score of ‘5’ for Creditor Rights, as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. The affirmation of Sri Lanka’s LTFC IDR at ‘RD’ reflects a default event.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
The LTLC IDR will be further downgraded once the government executes its domestic debt restructuring.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Following completion of the DDE, the sovereign LTLC IDR will likely be lifted out of ‘RD’ to a rating that appropriately reflects its prospects.
For the LTFC IDR, completion of the foreign-currency commercial debt restructuring that Fitch judges to have normalised relationship with private-sector creditors may result in an upgrade.
Sovereign Rating Model (SRM) and Qualitative Overlay (QO)
In accordance with the rating criteria for ratings in the ‘CCC’ range and below, Fitch’s sovereign rating committee has not used the SRM and QO to explain the ratings, which are instead guided by the rating definitions.
Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LTFC IDR. Fitch’s QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the LTFC IDR, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.
Best/Worst Case Rating Scenario
International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Sri Lanka has an ESG Relevance Score of ‘5’ for Political Stability and Rights as WBGI have the highest weight in Fitch’s SRM and are highly relevant to the rating and a key rating driver with a high weight. As Sri Lanka has a percentile rank below 50, for the respective governance indicator, this has a negative impact on the credit profile.
Sri Lanka has an ESG Relevance Score of ‘5’ for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as WBGI have the highest weight in Fitch’s SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Sri Lanka has a percentile rank below 50 for the respective governance indicators, this has a negative impact on the credit profile.
Sri Lanka has an ESG Relevance Score of ‘4’ for Human Rights and Political Freedoms, as the Voice and Accountability pillar of the WBGI is relevant to the rating and a rating driver. As Sri Lanka has a percentile rank below 50 for the respective governance indicator, this has a negative impact on the credit profile.
Sri Lanka has an ESG Relevance Score of ‘5’ for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. Sri Lanka’s LTFC IDR is ‘RD’ as the sovereign is in default on its foreign-currency debt obligations.
Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Colombo (LNW): A Parliament Select Committee has been appointed to probe into Sri Lanka’s bankruptcy status and submit recommendations on the matter.
The PSC will be chaired by MP Sagara Kariyawasam, Secretary General of the Sri Lanka Podujana Peramuna (SLPP), and followed by State Minister D.V. Chanaka, Minister Pavithradevi Wanniarachchi, MPs Vijitha Herath, Mahindananda Aluthgamage, Eran Wickramaratne, Ashok Abeysinghe, Jayantha Ketagoda, Harshana Rajakaruna, Pradeep Undugoda, Sanjeeva Edirimanna, Nalaka Kottegoda, Shanakiyan Rasamanickam, and Ranjith Bandara.
Colombo (LNW): Transparency International Sri Lanka (TISL) condemned the private member’s bill presented by Ruling Party MP Jayantha Ketagoda to re-convene the dissolved Local Government Authorities without holding elections, calling the move would be a heavy blow to the people’s sovereignty enshrined in the Constitution.
In a statement, the TISL pointed out that any attempt to pass such amendment must be roundly defeated, and called on all citizens to stand up for their voting rights, by opposing this move.
Full Statement:
“Transparency International Sri Lanka (TISL) condemns the anti-democratic private member’s bills presented to the Parliament of Sri Lanka by SLPP MP Jayantha Ketagoda to re-convene the dissolved Local Government Authorities (LGAs) without holding elections. TISL believes that this move would be a heavy blow to the people’s sovereignty enshrined in the Constitution.
Local Government Members are the grass-roots level public representatives. Regular elections are essential for the people’s mandate to be reflected in the LGAs. In addition, this Amendment sets a bad precedent as it creates a risk of abusing the legal framework to prevent holding timely elections, including national elections. This can lead to the people losing faith in the entire democratic system in the country, with negative implications to the rule of law as well.
Therefore, TISL emphasizes that any attempt to pass this Amendment must be roundly defeated. TISL calls on all citizens to stand up for their voting rights, by opposing this move.”
Colombo (LNW): Sri Lanka received three ‘Double Wattled Cassowaries‘, a species of flightless birds, under an animal exchange programme with Thailand last night (05), Daily Mirror reported.
According to Daily Mirror report, two males and one female Cassowaries about nine months old, weighing about sixty kilograms each were brought to the Katunayake Bandaranaike International Airport (BIA) last night at 11.10 p.m. from Kuala Lumpur, Malaysia, by Malaysia Airlines flight MH-179.
These animals are believed will be handed over to the Dehiwala zoo.
Colombo (LNW): The Right to Information (RTI) Commission yesterday (05) reprimanded Parliament officials for withholding information pertaining to the report issued by the Presidential Commission of Inquiry (PCoI) on the Easter Sunday massacre, calling it ‘a punishable offence.’
This declaration was made by a four-member bench of the Commission which concluded a seven-month long hearing of a RTI appeal against the Parliament of Sri Lanka on the allegation of not releasing sections of the PCoI report containing evidence recorded from the wife of the Easter attack bomber Zahran Hashim and several top Police and Military intelligence officials to the public.
Journalist Tharindu Jayawardena on behalf of the Centre for Society and Religion (CSR) lodging a RTI application with Parliament demanded that the copies of the evidence produced by Hashim’s wife Abdul Cader Fatima Hadiya, ex SDIG of the Criminal Investigation Department (CID) Ravi Seneviratne, ex CID Director Shani Abeysekara, DIG Nalaka Silva, SDIG Nilantha Jayawardena, ex Director of Military Intelligence Chula Kodituwakku, Naufer Moulavi and Gaphoor Mama pertaining to the probe on the Easter Sunday massacre be released.
However, Parliament had initially declined the above appeal, stating that such information was not in its possession. Later, the attorney representing the appellant had submitted facts to the RTI Commission confirming that these information are, in fact, possessed by Parliament, and the latter made rather a contradictory statement suggesting that releasing such information could violate the Parliamentary Privileges Act.
The Commission observed that it would be an offence punishable by law to produce false information pertaining to the matter, and informed Parliament to make its final written submissions by August 04, 2023 and the appellant to make its final submissions by August 18, 2023.
Colombo (LNW): The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to slash the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the CBSL by 200 basis points to 11 per cent and 12 per cent, respectively.
The move comes in after ‘careful analysis of the current and expected developments, including the faster-than-envisaged disinflation process and benign inflation expectations in the domestic economy,’ the CBSL said.
This will aim the enabling of the country’s economy to reach its potential and stabilising inflation at mid-single-digit levels in the medium term, whilst easing pressures in the financial markets.
By doing so, the CBSL expects that the market interest rates, particularly lending rates, will adjust downwards adequately and swiftly.
PMD: Minister of Buddhasasana, Religious and Cultural Affairs Vidura Wickramanayaka, stated that new legislation will be enacted to combat all actions that jeopardize religious unity.
The Minister reiterated that under the guise of freedom of speech or religion, no one has the right to offend any religion.
Minister of Buddhasasana, Religious and Cultural Affairs Vidura Wickramanayaka expressed these views today (05) during a press conference themed “One Way to a Stable Country” held at the Presidential Media Center yesterday (05).
Colombo (LNW): The Monetary Board of the Central Bank of Sri Lanka (CBSL) has extended the suspension on Perpetual Treasuries Limited (PTL) from carrying on businesses and activities of a Primary Dealer for a period of six months.
The Monetary Board has taken this decision in compliance with the regulations provided by the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance.
