S&P cuts Ukraine foreign-currency rating

S&P said it lowered Ukraine’s foreign-currency rating to CC from CCC but affirmed the CCC+/C local-currency, and uaBB national scale ratings.

The agency said it expects the Ukrainian government to start formal talks on debt restructuring with its private creditors soon and finish the process by the middle of this year. The current standstill ends in August.

“The rating action reflects our belief that the inclusion of commercial creditors (eurobond holders) in Ukraine's ongoing government debt relief effort is a virtual certainty. This effort aims to ease external debt service pressure and restore public debt sustainability as part of the ongoing Extended Fund Facility (EFF) arrangement with the IMF,” S&P said in a press release.

Without the IMF’s aid, Ukraine faces payments on eurobonds of $4.5 billion in 2024 and some $3 billion on average annually in 2025-2027.

The outlook is negative for the foreign-currency rating is negative.

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