S&P lifts Ukraine to stable

Standard & Poor's said it revised the outlook on Ukraine to stable from negative.

The agency also said it affirmed the B- foreign- and B local-currency long- and short-term sovereign credit ratings on Ukraine.

S&P also said it affirmed the long-term Ukraine national scale rating at uaBBB-.

The stable outlook reflects a view that the $15 billion in direct financing that Russia said it would provide to the Ukrainian government should cover the government's external financing needs over the next 12 months, the agency said.

With rollovers of trade financing and other private sector debt, S&P said it now expects Ukraine's foreign-currency reserves to stabilize, further supported by an additional agreement to reduce by about 30% the price at which Naftogaz imports gas from Gazprom.

The agency said it understands that Russia could revise this financial aid on a quarterly basis.

The ratings are constrained by a view of political turbulence, economic decline, financial sector stress and weak external liquidity, S&P said.

The ratings are supported by Ukraine's still relatively low, albeit rising, government debt burden and fairly diversified economy, the agency said.

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