The Fitch Ratings rating agency has downgraded Ukraineʼs credit rating from CC (very high credit risk) to C (imminent default).
The relevant notice was published on the agencyʼs website.
Fitch explains that the agreement on the restructuring of Eurobonds, adopted after the law adopted by the parliament, allows the suspension of payments on external commercial debt and marks the beginning of a process similar to default.
According to Fitch, the agreement with the creditors is a "problem debt exchange" as it involves reducing the principal amount of the debt and interest, as well as extending the repayment terms.
- In August 2022, the owners of Eurobonds agreed to a two-year postponement of payments and their repayment terms. Ukraine has reached such an agreement regarding almost 75% of the total principal amount of securities in circulation. Most of Ukraineʼs creditors have suspended payment obligations until 2027.
- In October 2023, Reuters reported that Ukraine was discussing with foreign bondholders plans to restructure $20 billion in debt and the possibility of raising new financing.
- In May 2024, The Wall Street Journal wrote that foreign creditors of Ukraine want to resume payments on the national debt as early as 2025.
- On July 22, Ukraine agreed with the owners of Eurobonds to restructure its external debt — this will save more than $30 billion.