S&P cuts Ukrainian Railways

S&P said it downgraded Ukrainian Railways’ foreign-currency issuer rating to SD, selective default, from CC. The CC local-currency issuer rating is unchanged.

The downgrade follows the majority of UR’s holders of its 2024 and 2026 eurobonds consenting to the railroad’s proposal to defer payments by 24 months. S&P does not rate the bonds.

“Upon the FC debt restructuring taking effect, we could consider the default as cured and could raise the rating from SD, reflecting new terms and conditions of the debt in the rating.

“UR's debt restructuring comes amid significant liquidity pressures on UR emanating from the war between Russia and Ukraine. There are also high uncertainties regarding the Ukrainian government's financial capacity to provide further timely support to UR. The deferral of the debt service payments will allow UR to use liquidity to cover ongoing operating and capital expenditures,” the agency said in a press release.

The outlook is negative.

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