18 August 2022, Thursday, 10:27 166

Fitch upgrades Ukraine's foreign currency rating from RD to SS

Редактор: Roman Vaniyan

The Fitch international rating agency has updated Ukraine's long-term foreign currency credit rating from RD (limited default) to CC (probable default).

That follows from a statement by the Agency, reports Ukrainian News Agency.

The rating was upgraded thanks to the restructuring of the external debt.

Nearly USD 6 billion in principal and interest on Ukrainian Eurobonds was deferred for 24 months, easing pressure on Ukraine to service its foreign debt amid shrinking international reserves and pressing war-related spending needs.

Restructuring was approved by 75% of bondholders (by aggregate principal amount), which exceeds the minimum required of 66.7%.

However, it is noted that there are unresolved debt sustainability risks that are the result of the Russian attack.

The agency expects the war to continue well into 2023, pushing public debt above 100% of GDP, adding to already huge costs to infrastructure and the economy, and adding to inflationary and external pressures, while the sources of financing the deficit remain uncertain.

As Ukrainian News Agency reported, on July 20, a group of creditors of Ukraine from the G7 countries (USA, Canada, Great Britain, Germany, France, Italy, and Japan) and members of the Paris Club of Creditors announced their intention to postpone the payment of the principal amount of the debt and interest until the end of 2023 with the possibility of extending the deferral for a year (until 2024).

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