Moody's: Ukraine unchanged

Moody's Investors Service said that last week's default by an unrated state-owned company is consistent with the agency's B2 (negative outlook) sovereign credit rating for the government of Ukraine, adding that the company, Ukraine Rail (Ukrzaliznytsia), defaulted on a principal payment on a Barclays Capital-led syndicated loan on Nov. 20.

"There is no sovereign guarantee for this loan," noted Moody's analyst Jonathan Schiffer, "and there are no cross-default clauses between this loan and a second Ukrzaliznytsia loan arranged by Deutsche Bank that does contain a government guarantee for $700 million that would trigger a sovereign default."

In Moody's opinion, the government is again giving clear signals that it does not wish to assume responsibility for outstanding debt of quasi-sovereign corporates and banks.

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