S&P assigns a B+ sovereign rating for Sri Lanka

International ratings agency Standard & Poor's has assigned a B+ sovereign rating for Sri Lanka, President Mahinda Rajapakse said Thursday. International ratings agency Standard & Poor's has assigned a B+ sovereign rating for Sri Lanka, President Mahinda Rajapakse said Thursday. Rajapakse, in his capacity as Finance Minister, made this announcement during his budget speech to parliament.

Analysts said a B+ rating, which falls into the highly speculative grade, takes into account the country's debt repayment track record.

But S&P's rating, is a notch lower than Fitch Ratings Inc., which assigned a speculative BB- rating for the island.

Fitch said the rating reflected Sri Lanka's fragile security situation and weak public finances.

Analysts expect the government to use the credit ratings to sell its maiden bonds in the international markets next year and also set a benchmark for local companies.

New York based S&P, last year assigned a B+ foreign-currency rating to Sri Lanka Telecom Ltd., the island's biggest fixedline operator. The agency assigned a BB rating for SLT's local currency debt.

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