UL services its $ 175 m bond despite sovereign default

SriLankan Airlines announced yesterday it has serviced the interest relating to its $ 175 million/7% guaranteed bond due in 2024 and guaranteed by the Government.

“The interest was paid in full within the applicable grace period using company funds,” the national carrier said in a brief statement.

The coupon payment was due on 24 June. The settlement within the one-month grace period was after raising concern of serviceability of the Singapore-listed Bond citing the deterioration in Sri Lanka’s economy.

In May, Fitch Ratings said SriLankan Airlines guaranteed bonds are part of the debt moratorium announced on 12 April by the Government, on several categories of sovereign and public sector entities’ external debt. The moratorium has therefore triggered the commencement of a default-like process for SLA, in Fitch's view.