Fitch confirms Ukraine at restricted default level: Reasons
Photo: Fitch Ratings confirmed the rating of Ukraine (Getty Images)
The international agency Fitch Ratings has confirmed Ukraine's long-term foreign currency rating at the level of "Restricted Default" (RD). The rating remains at this level as long as Ukraine continues to restructure its external commercial debt, according to the Fitch's statement.
As stated in the message, Ukraine continues to restructure its external commercial debt.
Following the successful completion of the Eurobond exchange in September 2024, the government ordered a temporary suspension of payments on the external commercial loan from Cargill ($0.7 billion, payments suspended from September 3, 2024), the state-guaranteed Eurobonds of Ukrenergo ($825 million, November 9, 2024), and GDP warrants (payments suspended from May 31, 2025).
The agency expects debt service suspension to last until the end of the debt restructuring process.
"Ukraine's LTFC IDR will remain 'RD' until Fitch judges the exchanges have been completed and relations with a significant majority of external commercial creditors are normalised," the message states.
Debt restructuring
Recall that in July, Ukraine reached an agreement with private creditors to postpone external debt payments.
In September, Ukraine announced the completion of its debt restructuring operation.
The debt was reduced by $9 billion, which represents a nominal 37% decrease in debt value from the agreement's start and a 60% reduction in the net present value of the debt.
This restructuring led international agencies to downgrade Ukraine's rating to "Restricted Default."
Currently, this rating has no impact on Ukraine, as Kyiv does not plan to access the market for commercial debt. All budget deficit financing is secured through official channels involving governments and international financial institutions.
