The Fitch agency upgraded Ukraine's credit rating
The rating increased due to the restructuring of external debt
What happened? The Fitch Ratings agency upgraded Ukraine's long-term foreign currency credit rating from “RD” (restricted default) to “CC” (possible default).
Source. The agency's website.
Details. It is noted that the rating increased due to the restructuring of the external debt. As approximately $6 billion of principal and interest on Ukraine's Eurobonds has been deferred by 24 months, alleviating external debt servicing pressure. The restructuring received the consent of 75% of bondholders (by aggregate principal amount), above the 66.7% minimum required.
Despite this, analysts of the rating agency note the unresolved debt sustainability risks resulting from russia's attack.
“We expect the war to extend well into 2023, driving public debt above 100% of GDP, adding to the already huge costs to infrastructure and economic output, and fuelling inflationary and external pressures, while deficit financing sources remain uncertain. A broader restructuring of the government's commercial debt is therefore probable in our view, although the timing is uncertain,” Fitch points out.
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