‘Ukraine to declare default’: S&P Global Ratings agency downgrades Ukraine’s credit rating

The analytical agency S&P Global Ratings, which is among the top three most influential international rating agencies, has downgraded Ukraine’s credit rating. According to its experts, a new restructuring of the country’s external debt is “practically inevitable.”

This was reported by the Bloomberg agency.

The agency lowered Ukraine’s credit rating by two notches from “CCC” to “CC,” which is the second-to-last rating before default.

“We expect that in the short term, the Ukrainian government will start official negotiations on debt restructuring with private creditors and complete this process by the middle of this year. We consider it almost certain that Ukraine will default on its external commercial obligations,” explained S&P Global Ratings.

The agency’s forecast for the rating in foreign currency is negative, while for the rating in the national currency, it is stable.

“We understand that Ukraine’s domestic currency-denominated government debt is not covered by the debt restructuring plan,” the agency noted.

This year, Ukraine is expected to pay $4.5 billion on bonds.

It is worth recalling that in 2022, the Ukrainian authorities explored the possibility of restructuring the external debt. At that time, the Fitch Ratings agency changed Ukraine’s long-term credit rating in foreign currency from “RD” (restricted default) to “CC” (likely default).

It was mentioned in the memorandum with the IMF released in December 2023 that Kyiv intends to carry out debt restructuring in 2024. Ukraine will seek debt restructuring from creditors under the terms of the moratorium on debt payments for the entire duration of the IMF program – that is, until 2027.