Reuters - S&P Global Ratings cut Sri Lanka's rating as an issuer of foreign currency debt to 'selective default' after the South Asian country missed sovereign bond interest payments, S&P said on Monday.

The bonds which had missed payments, maturing in 2023 and 2028, were cut to 'default' and the overall rating could be further cut to 'D' on confirmation of the non-payment after a 30-day grace period.

S&P said it does not expect the government to make payments during that period.

The weight of COVID-19 further weighed on revenues while the cost of imports sky-rocketed, and the situation deteriorated to the point of large-scale civil unrest on the streets.

Earlier this month Sri Lanka suspended its debt service payments and approached the International Monetary Fund.

Sri Lanka has about $14 billion on foreign bonds outstanding plus $26 billion in local currency debt, according to Refinitiv data.

"The negative outlook on our 'CCC-' long-term local currency sovereign rating on Sri Lanka reflects the high risk that the government could restructure its local currency debt amid the country's economic, external and fiscal pressures," S&P said in a statement.