Fitch Upgrades Sri Lanka Telecom's National Rating to 'AA+(lka)' After Scale Recalibration

Global credit rating agency Fitch Ratings has revised Sri Lanka Telecom PLC's (SLT) National Long-Term Rating upward to 'AA+(lka)' from its previous standing of 'AA-(lka)', following a broader recalibration of Sri Lanka's National Rating scale. The rating carries a Stable Outlook.

What Prompted the Revision?

The upgrade is not a reflection of any fundamental change in Sri Lanka Telecom's individual financial performance or business operations. Rather, it stems from Fitch's decision to recalibrate the Sri Lankan National Rating scale — a process that reassesses the relative creditworthiness of rated entities within the country against one another.

Such recalibrations are periodically undertaken by rating agencies to ensure that national scale ratings accurately capture the distinctions in credit quality among local issuers, particularly in markets that have experienced significant macroeconomic shifts.

Significance for Sri Lanka Telecom

The revised rating of 'AA+(lka)' places Sri Lanka Telecom among the highest-rated entities on the national scale, signalling strong creditworthiness relative to other Sri Lankan institutions. The Stable Outlook indicates that Fitch does not anticipate any near-term changes to this revised rating.

Sri Lanka Telecom, which is majority owned by the Sri Lankan government, is the island nation's leading telecommunications service provider, offering a broad range of fixed-line, broadband, and mobile services across the country.

Broader Context

The recalibration of Sri Lanka's National Rating scale comes as the country continues its economic recovery following one of its most severe financial crises in recent history. Adjustments to national rating scales allow investors and stakeholders to make more accurate assessments of credit risk within the local market environment.

For Sri Lanka Telecom, the upgraded rating is likely to strengthen investor confidence and may positively influence the company's ability to raise financing on favourable terms going forward.