S&P cuts Ukrainian Railways

S&P said it downgraded Ukrainian Railways to CCC from CCC+ and placed it on CreditWatch with negative implications.

Given the ongoing war with Russia, S&P said it sees uncertainty regarding the government of Ukraine's ability to continue providing financial support and believes the company's assets are at risk of being further damaged, and possibly rendered inoperable, hurting its ability to generate cash flows.

“Without additional government intervention or significant cuts to operating expenditure, we believe UR is likely to have to restructure its payment schedule or default on its debt payments within 12 months because existing liquidity will be depleted in order to maintain operations,” the agency said in a press release.

The negative watch indicates a potential downgrade if the current adverse operating environment limits cash flow from operations such that UR is unlikely to make payments with the existing maturity schedule of its debt, S&P said.

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