Higher interest rates have begun to pressure borrowers. (ICR - Interest Coverage Ratio)
ECONOMYNEXT – Sri Lankan companies face higher borrowing costs owing to a rise in benchmark interest rates, rating agency Moody's Investors Service said.
Banking sector asset risks will increase after excessive credit expansion in the last two years and a rise in borrowing costs, Moody’s said in a new report on Sri Lankan banks.
“Nonperforming loan (NPL) ratios have risen, and corporates are facing higher borrowing costs due to a rise in benchmark interest rates.”
Moody’s said corporates’ debt serviceability will be weakened by higher interest rates.
“Higher interest rates will hurt corporates’ repayment ability.”
Around 40% of corporates will have debt interest coverage ratios of less than 2 under a stressed scenario, the rating agency said, noting that higher interest rates have begun to pressure borrowers.
ECONOMYNEXT – Sri Lankan companies face higher borrowing costs owing to a rise in benchmark interest rates, rating agency Moody's Investors Service said.
Banking sector asset risks will increase after excessive credit expansion in the last two years and a rise in borrowing costs, Moody’s said in a new report on Sri Lankan banks.
“Nonperforming loan (NPL) ratios have risen, and corporates are facing higher borrowing costs due to a rise in benchmark interest rates.”
Moody’s said corporates’ debt serviceability will be weakened by higher interest rates.
“Higher interest rates will hurt corporates’ repayment ability.”
Around 40% of corporates will have debt interest coverage ratios of less than 2 under a stressed scenario, the rating agency said, noting that higher interest rates have begun to pressure borrowers.
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