S&P downgrades Ukraine’s rating and predicts default on external debts
11 March 2024 11:25
The international rating agency S&P Global Ratings has downgraded Ukraine’s long-term sovereign rating from CCC to CC. The information was published on the agency’s website, Kommersant Ukrainian reports 
Thus, the outlook on Ukraine’s long-term foreign currency sovereign rating has been downgraded to CC with a negative outlook.
“We expect the Ukrainian government to start formal debt restructuring negotiations with private creditors in the short term and complete the process by the middle of this year. We believe it is almost certain that Ukraine will default on its external commercial obligations,” the agency explained its actions, Interfax-Ukraine reported.
At the same time, S&P affirmed our short-term foreign currency ratings of ‘C’, local currency ratings of ‘CCC/C’ and national scale ratings of ‘uaBB’. The outlook on the foreign currency ratings is negative and the outlook on the local currency rating is stable.
The agency added that it is likely to downgrade the rating to ‘SD’ (selective default) during the restructuring, as it considers it problematic in light of the ongoing balance of payments and budgetary issues.
The agency’s decision was prompted by the Cabinet of Ministers’ decision to request a 24-month deferral of payments on all external liabilities of state-owned companies. Such a restructuring, according to S&P analysts, is tantamount to a default.
The last time S&P downgraded Ukraine’s long-term foreign currency rating from B to CCC was in late May.
