Fitch cuts Sri Lanka Telecom view to negative

Fitch Ratings said it affirmed Sri Lanka Telecom plc's long-term foreign- and local-currency issuer default ratings at B+ and BB-, respectively, along with its national long-term rating at AAA(lka) and senior unsecured notes due in 2009 at B+ with recovery rating of RR4.

The outlook on its issuer default ratings was revised to negative from stable. The outlook on its national long-term rating is stable.

The outlook downgrade follows the revision in outlook on the Democratic Socialist Republic of Sri Lanka's foreign- and local-currency issuer default ratings to negative, Fitch said.

The ratings are constrained by the sovereign's ratings, the agency said.

Fitch said risks to the company's financial profile could increase should the financial profile of the sovereign continue to deteriorate, hence the negative. Such risks include potentially higher dividend payouts to support government finances, the agency said, as well as the possibility of the company's operating environment being negatively impacted by an ongoing deterioration of macroeconomic factors.

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