Fitch Ratings has lowered its long-term foreign currency default rating from CC (highly likely to default) to C (default is imminent).
The downgrade is due, in particular, to the agreement between the Ukrainian government and Eurobond holders on the terms of the restructuring. The international agency notes that this agreement provides for a significant reduction in principal and interest, as well as an extension of maturity.
As such, Fitch expects Ukraine to default on its external commercial debt, including the 2026 Eurobond coupon due on 1 August, until a restructuring agreement with bondholders is finalised.
- Ukraine has $19.7bn in outstanding bonds and owes $2.6bn in GDP warrants, a fixed-income instrument whose payments are tied to economic growth.
- Last week, the Verkhovna Rada upheld the government's right to suspend payments on public debt during the restructuring.