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Sri Lanka Downgraded as It Eyes Loan From China to Service Debt

  • President Rajapaksa asked Beijing to consider debt restructure
  • Governor Cabraal says there’s understanding China will help
Pedestrians and workers pass stores in Colombo, Sri Lanka.

Pedestrians and workers pass stores in Colombo, Sri Lanka.

Photographer: Tashiya de Mel/Bloomberg
Updated on

S&P Global Ratings cut Sri Lanka’s credit rating deeper into junk, hours after the nation’s central bank governor said it sees the possibility of fresh lending by China to help meet its debt servicing obligations.

The company lowered the long-term sovereign credit rating to CCC from CCC+ with a negative outlook, and affirmed the C short-term rating. Sri Lanka has a $500 million bond due Jan. 18 -- which it has said it has allocated foreign currency for -- and another $1 billion of notes maturing in July.