Moody's places Sri Lanka's rating under review for upgrade after bond-exchange offer

Moody's has placed Sri Lanka's Ca long-term foreign currency rating on review for an upgrade, the credit ratings agency said on Wednesday, following the government's bond-exchange offer that aims to complete the restructuring of international bonds.

The bond swap, launched on Tuesday, is an important part of the island nation's ongoing $12.55 billion debt restructuring and its efforts to stabilize the economy.

The country had defaulted on its foreign debt for the first time in May 2022, reeling under a severe crisis amid a heavy debt burden and declining foreign exchange reserves.

Moody's also assigned a provisional Caa1 credit rating to Sri Lanka's new US dollar-denominated debt issuances, which are part of its bond-exchange offer.