Fitch slashes Naftogaz of Ukraine

Fitch Ratings said it downgraded NJSC Naftogaz of Ukraine's long-term issuer default rating to C from CCC following its consent solicitation to defer its debt servicing of its eurobonds, including bonds that are due on Tuesday.

“We view the solicitation as a distressed debt exchange (DDE) under Fitch's criteria, given the restructuring would involve a material reduction in terms and is conducted to avoid insolvency,” the agency said in a press release.

Ukraine’s government has ordered the company to buy and import up to 5.6 billion cubic meters, which will probably exceed Naftogaz’s cash balance, Fitch noted.

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