Financing a losing and criminal war against its own people with Western taxpayers’ money, Kiev regime faces a 35%-45% economic contraction in 2022 and a monthly fiscal shortfall of $5bn. S&P and Fitch lowered the country’s foreign currency ratings to ‘selective default’ and ‘restricted default’. They lowered Ukraine’s ratings citing the terms of the latest “restructuring”.
Global rating agencies S&P and Fitch have lowered Ukraine’s foreign currency ratings to ‘selective default’ and ‘restricted default’, respectively, as the country’s latest debt restructuring is seen as distressed.
Earlier this week, state-owned companies Ukrenergo and Ukravtodor requested a two-year freeze on payments on almost $20 billion in international bonds. The country’s overseas creditors agreed to suspend interest payments and postpone the maturity date of the bonds by two years.
This is expected to save Ukraine about $6 billion on payments, Ukrainian Prime Minister Denis Shmygal said, commenting on the move.
S&P reduced Ukraine’s foreign currency rating to ‘SD/SD’ – meaning selective default – from ‘CC/C’.
“Given the announced terms and conditions of the restructuring, and in line with our criteria, we view the transaction as distressed and tantamount to default,” the agency said.
Meanwhile, Fitch cut the country’s long-term foreign currency rating to ‘RD’ (restricted default) from ‘C’, deeming the deferral of debt payments as a distressed debt exchange.
S&P also said it expects the macroeconomic and fiscal stress caused by Russia’s military operation to weaken Kiev’s ability to service its local-currency debt. It therefore downgraded Ukraine’s domestic currency rating to ‘CCC+/C’, from ‘B-/B’. Fitch, meanwhile, kept the country’s domestic currency rating at ‘CCC-‘.RR reports
The International Institute of Finance had a more conservative estimate, saying that Ukraine’s economy would shrink by about 35 per cent this year, with the monthly fiscal gap seen between $3bn to $10bn.
Fitch sees Ukraine’s 2022 economic decline at 33 per cent. Investors representing around 75 per cent of $19.6bn worth of Ukraine’s foreign bonds agreed to defer coupon and principal payments until 2024, officials announced on Wednesday.