Oct 08, 2010 (LBO) – Fitch Ratings has upgraded Sri Lanka’s Dialog Axiata’s (Dialog) national long-term rating to ‘AAA(lka)’ from ‘AA(lka)’, and revised the outlook to stable from negative, a statement said. This is to help mitigate potential currency risk on the scheduled repayments of its US dollar debt, which fall due between 2011 and 2015, Fitch said.
The agency has also upgraded the national long-term rating on Dialog’s outstanding 2.5 billion rupees redeemable preference shares to ‘AA+(lka)’ from ‘AA-(lka)’.
“While Dialog’s ratings factor in support from its parent, Axiata Group Berhad, in arriving at the final rating, the upgrade reflects the company’s improved stand-alone credit profile, and liquidity position,” Fitch said.
This was a result of Dialog’s successful cost rationalisation exercise and reduced tariff pressure within the local mobile industry at present which is likely to allow further balance sheet improvements over the short-term, the rating agency said.
It also attributed the upgrade to Dialog’s strong market share within the mobile industry amid improving economic conditions, and its improved operating cash flows.
Fitch said it assesses Dialog’s standalone rat