SLT outlook revised to stable

Standard & Poor's (S&P) Ratings Services revised its outlook on the corporate credit ratings on Sri Lanka Telecom PLC (SLT), an integrated telecommunications services provider, to stable from negative.

Standard & Poor's affirmed its 'B+' corporate credit rating and long-term senior unsecured debt rating on the company, S&P said.

This rating action was made in conjunction with Standard & Poor's Affirmation of the sovereign ratings on Sri Lanka and outlook revision to stable from negative.

The outlook revision reflects our opinion of Sri Lanka's improved external liquidity position and better prospects for policy formulation under the aegis of the new IMF standby loan agreement.The ratings on SLT reflect the weak economic situation in the country,margins pressure as a result of intensifying competition, and high capital expenditure requirements, (S&P) said.

These weaknesses are partially offset by the company's leading market position in the fixed-line business, growth potential and improving market share in the wireless segment, and strong cash flow measures with debt to EBITDA of about 1.6x as at June 30, 2009. SLT's stand-alone credit profile is relatively strong for the rating, meaning that its final rating is capped at the current transfer and convertibility assessment on Sri Lanka of 'B+'.