So far, the bank has written to international rating agents, like Citibank and J P Morgan who currently have a local presence, about playing an advisory role in the rating process.rn
rnPlans for a sovereign rating have been pending for several years, but have always been put off because of the war. rn
rnBut a 20-month long ceasefire and a rebound in the economy, has prompted the government to seek a country rating from at least two international rating agencies, the Central Bank said on Friday. rn
rnThe bank says that the government had no immediate plans to raise funds by issuing bonds in international capital markets. rn
rnThe rating process will be done in two stages.rn
rnFitch Ratings International, which has a local office through Fitch Ratings Lanka, will get the job to do the initial rating. rn
rnCentral Banks Deputy Governor, W A Wijewardene told reporters last month, that a rating from Fitch was expected by end January next year.rn
rnThe government also wants a rating from one of the two internationally reputed rating agencies, namely, Standard & Poors and Moodys Investor Services, the bank said. rn
rn"An international sovereign rating will improve the awareness and profile of Sri Lanka among international investors," the bank said.rn
rnIt also said it hoped the sovereign rating would "facilitate the private sector in their dealings with the international community". rn
rnSri Lankas total debt as at end-July was Rs. 1.76 trillion or US$ 18.6 bn, up from Rs. 1.60 trillion in 2002. Total debt to GDP ratio stands at about 110 percent at present. rn
rnAbout 40 percent of loans are secured at concessionary rates from foreign donors. rn
rnLast month, the government borrowed US$ 100 mn through a five-year floating rate note from Citibank. The issue was its largest-ever foreign commercial borrowing. rn
rnIn June, the government signed up for a US$ 33 mn loan from HSBC, to be paid over a 13 'bd year period. The HSBC issue is the countrys longest ever foreign commercial borrowing. rn
rnFitch Ratings Lanka said last year that Sri Lankas sovereign rating is on par with its neighbour India, because of its record of fiscal discipline and never having defaulted on a payment. rn
rnFitch put Sri Lankas rating at between B-plus and BB-plus, in the same range as India, but below investment grade of BBB. rn
rnBut a rating now may be higher, with the economy forecast to grow nearly six percent this year and a steady inflow of foreign funds. rn
rnIndias local-currency debt is rated BB plus by Fitch, Ba2 by Moodys Investors Services and BB+ at Standard & Poors, all of which are junk ratings. Its foreign-currency debt is rated BB by Fitch, Ba1 at Moodys, and BB by S&Prn
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The Central Bank has sought proposals from international rating advisory firms to help the government obtain a sovereign rating.