Bad Line

Fitch Ratings International put incumbent network operator Sri Lanka Telecom’s senior unsecured local currency ‘BB’ rating on Rating Watch Negative, on account of possible bad debts accumulated on account of its overseas calling card unit. Fitch Ratings International put incumbent network operator Sri Lanka Telecom’s senior unsecured local currency ‘BB’ rating on Rating Watch Negative, on account of possible bad debts accumulated on account of its overseas calling card unit. At the same time, the senior unsecured foreign currency ‘B+’ rating of SLT and the ‘B+’ rating on its US$ 100 mn debt due 2009 have been affirmed, the rating agency said Monday.

Fitch’s Sri Lankan unit followed up with its last week’s warning by putting SLT’s AAA (sri) rating was put on a negative watch.

Fitch said it intends to resolve the Rating Watch following more detailed discussions with SLT’s management but expects any rating downgrades to be limited to one-notch.

The rating action reflects a number of recent developments, which have combined to potentially weaken SLT’s stand-alone credit profile, the terse statement said.

SLT has just taken the legal route to recover some Rs. 900 million it claims is due by its UK based international calling