(Washington) Rating agency Moody’s on Friday downgraded Ukraine’s rating to Ca, the last notch before default, due to the long-term effects of Russia’s war.
This downgrading of the rating “is motivated by the effects of the war with Russia which are likely to pose lasting difficulties for the economy and public finances of Ukraine”, detailed the agency in a press release.
“These challenges increase risks to public debt sustainability, making debt restructuring highly likely with significant losses for private sector creditors,” Moody’s added.
The rating agency, however, raised the outlook from negative to stable, signaling that it does not envisage in the short term, either to downgrade the rating again, or to raise it.
“The stable outlook reflects balanced risks […]which is consistent with a recovery in the event of default typically in the order of 35 to 65%,” said Moody’s.
Russia invaded Ukraine nearly a year ago on February 24, 2022.